| The National Social Security Fund Council entrusted Boshi,South,Huaxia,Changsheng,Jiashi and Penghua Fund Management Co.,Ltd.to carry out market-oriented investment in social security funds,so that the social security fund officially entered the Chinese securities market.The Social Security Fund has a special institutional background and operational mechanism.At the beginning of its establishment,it shoulders the arduous responsibility of the national economy and the people’s welfare.Since entering the market for 15 years,the Social Security Fund has insisted on investing in the goal of ensuring the asset value-added on the premise of ensuring the safety and liquidity of the fund assets.As of the end of June 2018,the annual average rate of return of social security funds reached 8.44%,and the cumulative income exceeded 1 trillion yuan.Statistics show that the investment income of social security funds has a certain correlation with the rise and fall of China’s A-share market.With the deepening of the social security fund’s participation in the stock market,the impact of social security fund holdings on listed companies has received more and more attention.The issue of whether the social security fund investment "can improve the financial information quality of listed companies" has become a hot topic for scholars to study and discuss.As one of the principles for measuring the quality of accounting information of listed companies,robustness plays a very important role in both academic and practical circles.The use of robustness can effectively protect the interests of investors and reduce the company’s capital cost and investment risk.China’s accounting standards also required the accounting conservatism as early as 1992,and it has not been reduced to this day.With the deepening of research on robustness,domestic and foreign scholars have begun to pay attention to the internal and external factors that affect the robustness of accounting earnings.Social security fund holdings as an external governance mechanism have been confirmed by scholars to have an impact on the accounting earnings robustness.In recent years,the social security fund’s investment reduction in the stock market has gradually increased.The reduction of the social security fund has gradually withdrawn from the governance and supervision of listed companies.How will the accounting earnings of listed companies change?In order to solve this problem,this paper selects China’s A-share listed companies that have been reduced by social security funds in 10 natural years from 2008 to 2017 as a research sample.Based on Basu model,the overall impact of social security fund investment reduction on accounting earnings robustness is investigated.And in-depth discussion of the regulatory effect of management compensation and equity concentration on this impact,in order to enrich the research results in the field of accounting earnings conservatism,provide some theoretical support to strengthen policy management for the policy makers to strengthen supervision over the changes in the accounting earnings of listed companies after the reduction of social security funds,and protect the vital interests of investors.According to the empirical research results of this paper,the accounting earnings stability of listed companies decreases with the increase of the proportion of social security fund investment reduction.There is a regulatory effect on the impact of management compensation and equity concentration on the stability of accounting earnings.Specifically,the increase in managerial compensation has weakened the negative correlation between the proportion of social security fund investment reduction and the accounting earnings of listed companies;and the increase in equity concentration has strengthened the negative correlation between the proportion of social security fund investment reduction and the accounting earnings of listed companies.The reason why the listed company’s accounting earnings stability will decrease with the increase of the social security fund investment reduction ratio is mainly due to the contradiction between the listed company management and the social security fund investors’ demand for the accounting earnings stability.Based on the principle of performance motivation and personal benefit maximization,management has the incentive to reduce the stability of accounting surplus when external governance ability is weakened.Managers with relatively low pay levels have a stronger incentive to improve performance by reducing their robustness in order to seek personal benefits.Companies with relatively high concentration of equity have a stronger ability to adjust the company’s accounting robustness.The innovation of this paper mainly has the following two aspects:First,this paper takes the reduction of the holding of social security fund as the research perspective,while the current research on the holding of social security fund as the object is mostly carried out from the perspective of increasing the holding.Secondly,this paper uses dynamic indicators to study the impact of changes in the shareholding of social security funds on listed companies,breaking through the previous research on institutional investors using the static index of shareholding ratio.From the practical point of view,the conclusions of this paper can remind regulators to strengthen the supervision of the financial information quality of listed companies that are reduced by social security fund investment,pay attention to the changes in the accounting earnings stability of listed companies,effectively play a regulatory role,and protect relevant interests of financial report users.On the other hand,this paper is helpful to remind investors and creditors to pay more attention to the quality of accounting information of listed companies that are reduced by social security fund investment,and to be more vigilant about the choice and change of corporate accounting estimation methods. |
