Research On The Influence Of Corporate Governance And External Audit On Earnings Management

Earnings management research began at the end of the twentieth century.The occurrence of the Enron and WorldCom events prompted the U.S.government to introduce the Sarbanes-Oxley Act to govern earnings management.In recent years,Zhongan Insurance,Dongbei Special Steel,and Fushun Special Steel have continuously issued financial advance loss announcements.When the company loses for the first year and expects to continue to lose money in the second year,it will tend to use earnings management to make adjustments to its statements.Earnings management events occur frequently and involve large amounts of money and have far-reaching implications.Based on this,this article develops the following studies,focusing on the impact of external audit on corporate governance and earnings management.Through combing the theory and literature,the in-depth study of the relationship between corporate governance,external audit,and earnings management is conducted.On the basis of the theory of combing,a model with credibility,a model for designing,and a model for this paper are used to conduct empirical research.Analyze the regression results,and finally come to the conclusions of the research,contact the actual situation,and make specific recommendations.The research significance of this article is divided into two parts.First,in terms of theory,expand the literature on corporate governance,external audit,and earnings management.Second,in practice,it aims to provide more practical information and suggestion for corporate governance earnings management and government-managed earnings management.This article analyzes the sample data of A-share listed companies from 2012 to 2016,selecting the ratio of the largest shareholder,the shareholding ratio of the second to the top ten shareholders,the proportion of senior management shares,the nature of the controlling shareholder,the proportion of independent directors,and the form of the stock et al.The corporate governance indicators,such as form and senior management,duality of chairman and general manage,board size,and board meetings,are integrated into a single indicator G using principal component analysis;earnings management is divided into accrued item earnings management and real activity earnings management;Whether the audit institution is a “four” represents external audit and studies the impact of external audit on corporate governance and earnings management.The results show that:(1)There is a negative correlation between corporate governance and accrual earnings management,and a positive correlation between corporate governance and real earnings management.(2)There is a negative correlation between the "four" accounting firms and the real earnings management and accrual earnings management.(3)External audit has a positive impact on corporate governance and earnings management.This article is structured as follows.The first chapter is the introduction,including the research background and meaning,covering the research objectives and content,introducing the research methods and framework.The second chapter is the literature review: combing and extending corporate governance,external audit and earnings management and related research literature.Through induction and deduction,the relationship between the three variables is clarified,which will pave the way for follow-up empirical research.The third chapter is the theoretical basis,mainly introduces the theoretical basis of this article and the concept definition of the involved variables.For example,based on the theory of information asymmetry,it discusses the mechanism of corporate governance and earnings management;it is based on principal-agent theory.The external audit has internal relations with corporate governance and corporate governance over earnings management;based on contract theory,it studies the containment of corporate governance and earnings management;and it explains the concept of variables in article research.The fourth chapter is to study the hypothesis,according to the theory and literature,from the actual situation in China,analyzing the existence of corporate governance,external audit and earnings management status.Finally,by analyzing the relationship between the three,and then put forward the article hypothesis;Sample data sources and screening mechanisms quantify the three variables of corporate governance,external audit and earnings management,and discuss their respective measurement methods;establish the model of this paper.The fifth chapter is empirical test and analysis,describes the data characteristics of individual variables,carries out correlation analysis,interprets multiple regression results,and tests the conclusions of the article.The sixth chapter is the conclusion and enlightenment,including the conclusions of the research,combining the conclusions and making policy recommendations on social issues in a timely manner,summarizing the innovation and contribution of this article,pointing out the deficiencies of the article,and looking forward to the future direction of development.