Research On The Restrain Of Non-executive Director’s Function On Earnings Management

Modern enterprises are the main problems after the separation of ownership and managerial authority of agency problems,the connection of the link between the board of directors as the shareholders of a company and management,how to effectively play its role has always been the research key to corporate governance issues.The first form of board structure is the formation of internal directors and external directors in the board of directors.Due to dispersion of European and American countries of the company is relatively general with independent directors,as the representative of outside directors,and is different from the European and American countries,China’s ownership structure determines the board of directors in general can be divided into executive directors,independent directors and non-executive director.In the board of directors,the executive director can serve as the internal director,so the supervisory role of the management is not obvious;And as independent directors of outside directors,in theory because of its completely independent of the listed company,should be able to effectively implement the functions,but actually because of the independent director appointment most affected by the management,governance effect is limited,it is often difficult to public opposition to the management behavior,often characterized by "inaction".Non-executive directors mostly have a certain influence of the small and medium-sized shareholders delegate directly,and non-executive director is not in the listed company as the management.therefore non-executive directors to its.represented by the interest groups have more motivation of supervision and management behavior.In addition,because of the surplus information is concerned about one of the important information when decision makers to make decisions.and managers in order to maintain its own interests,tend to manipulate earnings information,research shows that the management of surplus management makes the surplus information can not truly reflect the company’s business conditions and operating risks,it will damage the interests of shareholders.In this case.non-executive directors cannot ignore it.Based on this.this paper studies a non-executive director of earnings management governance role.This paper based on the theory of principal agent theory and resource dependence theory,and studied its influence on earnings management from two dimensions of non-executive director’s supervision function and strategic function.In this paper,the definition and measurement methods of non-executive director function,earnings management and shareholding structure are expounded by sorting out the relevant literatures at home and abroad.Then embarks from the theory,the system analyzes the functions of non-executive directors,earnings management and the relationship between equity ownership structure,and gives the corresponding research hypothesis,this paper expounds the three between the internal logic.In empirical research part,this article selects the Shanghai and Shenzhen A-share listed companies from 2012 to 2016 as sample data,the function of non-executive directors and earnings management,ownership structure,and other control variables are analyzed,and build the corresponding regression model,and demonstrates the research hypothesis.The relationship between non-executive director,earnings management and ownership structure is finally obtained.In this paper,the research results show that the non-executive directors’ supervision function and strategic function has inhibitory effect on earnings management,equity structure on the relationship between the functions of non-executive directors and earnings management regulation,and puts forward relevant inspiration at the last,the research and made a prospect for the follow-up research.