Earnings Management And Power Research Of Promotion Executives In State-owned Enterprises

Recent years,a number of listed companies have erupted in the event of executive change.According to Wind statistics,in the first half of 2016,902 companies got involved in the change of executives,3703 executives quit(excluding normal change),more than 700 executives left in March alone.As the core of the enterprise,the personality?personal ability and decision preference of senior executives are closely related to the development strategy of the enterprise.Frequent changes in executives will not only bring about changes in the company's personnel,but also have a significant impact on the business activities,performance and stock price of the company.In addition,the change of senior executives may bring serious problems of earnings management.Nonstandard earnings management activities can not reflect the real management level of executives,it also will reduce the quality of accounting information of listed companies,and mislead decisions of information users.At present,the change of senior executives and earnings management have become a hot issue in academic field.Many literatures have analyzed issues that related to executive turnover and earnings management,such as the motivation of executive change,the correlation between executives change and earnings management,the correlation of successor character and earnings management.However,the existing literature seldom discusses the earnings management activities of outgoing executives,and explores the differences between earnings management behaviors of different departure executives.Secondly,the research on executive power in the existing literature is mostly through the construction of static index,and it does not examine the change of executive power from the dynamic perspective through the change of their own positions and build up their influence.Using SOEs whose chairman or CEO changed from 2010 to 2015 in the A share market,this paper mainly focuses on the promotion of senior executives around SOEs,and explores the earnings management behavior before promotion and the promotion of power.The findings are as follows:(1)Executives who have promotion motivation will improve accounting performance through positive earnings management be fore leaving office;(2)After the promotion of former executives,successors are more likely to emerge from within the company.;(3)The former executives are more likely to continue their duties in the listed companies when they get a promotion;(4)After the promotion of the former executives,the external successor did not carry out "big bathing" earnings management.This shows that promotion executives also have a "deterrent" effect on external successors.In order to get higher power through promotion,executives will make significant positive earnings management before leaving office.This article confirms that the promotion executives not only obtain higher power through the new position,but also keep the "discourse power" of the listed companies by continuing to take the post of the listed company and recommending the successor of the internal personnel.On the one hand,this study enriches the related research on earnings management of former executive.On the other hand,it deepens readers' understanding of the power of state-owned enterprises to promote executive power and at the same time provides some experience for the reform of the selection and appointment mechanism of the senior executives in our state-owned enterprises.