Holdings Reduction Of Senior Managers,Corporate Governance And Earnings Management

The Introduction of GEM as an important development event in China capital market,promote the construction of multi-level capital market financing platforms.However,in recent years,especially in the capital market appeared frequently GEM listed company executives restricted shares executives massive holdings of shares of its post at the phenomenon,the scale of the market value of high remarkable reduction involved,the frequency of.Since the identity of the GEM company executives is unique,direct control of the listed company's business decisions and performance,and thus could affect its stock price.GEM company executives in the reduction process,along with the fight for the greater good of the motivation and the ability to manipulate the stock price,so executives in the reduction process is likely to manage earnings in order to obtain greater benefits.GEM company executives holdings of behavior to the capital markets deliver a strong signal,if executives to manage earnings in the reduction process,not only directly harm the interests of small investors,it will disrupt the market order,crack investors investor confidence.In China,the GEM listed company executives what kind of relationship exists between the holdings and earnings management,the systematic study of this literature is also less paper to measure earnings management from accrual earnings management and real earnings management activities of the two angles level,and expand the study from the following three aspects:First,executives in the reduction will be carried forward to the earnings management;second,the proportion of top executives and the accrual earnings management is positively related;third,the proportion of executives and real earnings management is positively related to earnings management;fourth,corporate governance can inhibit earnings management in the process of management.This paper selected from 2011 to 2014,executives have taken place in the growth enterprise market holdings of 265 listed companies as research samples,no executive holdings in 124 listed companies as comparative samples.The empirical analysis founding shows that there is accrual earnings management to alleviate companies' profits;The level of accruals earnings management is negatively correlated with the value of the sold shares;During the previous period of executives reduction,product sales costs were lowered to increase profits,an abnormal changes in cost of goods is negatively correlated with the market value of the sold;Better corporate governance restrained the accrual earnings management and real earnings management behavior during the process of executive reduction.Finally,according the results of the research,this study proposed some proposals to suppress earnings management behavior of listed corporation,such as,improving of governance mechanism of the listed companies,developing the board of supervisors and the independent director,and improving the external supervision mechanism,strengthening market supervision to increase the cost of executives' violating the rules.