| In recent years,listed companies punished by regulatory authorities due to excessive earnings management activities are commonplace.Companies often achieve specific objectives through earnings management.This will not only reduce the reliability of financial information,detract from corporate value,but also infringe on the interests of investors and adversely affect the healthy and steady development of the securities market.Therefore,what are the influencing factors of corporate earnings management,and how to curb corporate earnings management behavior is not only a research hotspot,but also the focus of external regulatory agencies and auditors.At present,some scholars gradually realize that corporate strategy is also an important factor in earnings management.However,the existing literature only qualitatively examines the impact of strategic types on earnings management.Therefore,quantitative research on the relationship between strategic differences and earnings management has research value.Auditing has been widely recognized as an external governance mechanism.Whether the firm’s industry expertise can effectively curb earnings management practices of enterprises has naturally been closely watched by scholars at home and abroad.Foreign scholars have come to a unanimous conclusion on this issue.There is a lot of debate in Chinese academia,so research on this issue helps clarify the relationship between industry expertise and earnings management.It is worth noting that the effect of industry expertise is not homogeneous among clients.Therefore,after considering the strategic differences,the relationship between the firm’s industry expertise and earnings management needs to be further studied.This article consists of the following six parts:The first part is introduction.Introduction primarily describes the background,significance,and methods of this thesis.In addition,it also involves the framework and the main innovations.The second part is literature review.This part will review and comb the literature from the three aspects of research related to earnings management influencing factors,industry expertise,corporate strategic differences,and make a review on this basis.The third part is about related theory and research hypothesis.First,it elaborates the related concepts of corporate strategy differences,industry expertise,and earnings management.Next,it introduces principal-agent theory,reputation theory,asymmetry of information theory,insurance theory,and finally puts forward the research hypothesis.The fourth part is the research design.This section mainly selects research samples based on the assumption,collects relevant data,establishes research models,and defines variables.The fifth part is empirical test and analysis of result.This section firstly conducts descriptive statistical analysis of the full sample and subsampled data,correlation analysis,analysis of regressions,robustness testing of empirical results and further analysis.The sixth part is the conclusion and suggestion.This section will summarize the results of the empirical study,put forward relevant recommendations,point out the limitations of this study,and finally indicate the development direction of the future research.This paper takes the data of the Shanghai and Shenzhen stock market2012-2016A-share listed companies as samples,and draws the following conclusions through empirical research:(1)The strategic difference is significantly positively correlated with the level of earnings management;(2)Industry expertise and Earnings management is significantly negatively related,that is,industry expert firms can effectively curb earnings management behaviors of companies;(3)Corporate strategic differences can weaken the inhibition of earnings management by industry expertise;(4)Further research results show that industry expertise can significantly inhibiting the company’s positive earnings management,but failed to effectively suppress negative earnings management.The innovations in this paper mainly include:(1)This paper examines whether the Corporate strategic differences have an impact on the gap between knowledge and professional competency between industry experts and general auditors,and then influence the relationship between industry expertise and corporate earnings management.Thus,it becomes a new perspective of research.(2)Different from the previous literature to examine the relationship between corporate strategy type and earnings quality from a qualitative point of view,this paper examines the impact of the level of corporate strategic diversification on the level of corporate earnings management from a quantitative perspective,and not only complements the earnings management factors research,but also expanded the economic consequences of corporate strategic differences study. |
