Internal Control Of Listed Companies In Manufacturing Industry For Real Earnings Management Impact Research

The manufacturing industry plays an important role in promoting the growth of the national economy.In the context of the major adjustments in the global manufacturing landscape and major changes in China's economic environment,the State Council proposed in May 2015 to achieve “Made in China” to “Chinese Intelligent Manufacturing”.However,there are many problems in the process of transformation.For example,the problem of real earnings management is widespread in China's manufacturing industry,which seriously affects the reliability of the financial information reported by the manufacturing industry,misleads the decision-making of information users and hinders the normal development of the manufacturing industry.Real earnings management is realized through the construction of real trading activities,with the characteristics of complex means and strong concealment.There are many factors that affect real earnings management,the most important of which is internal control.At present,many domestic and foreign scholars have found that effective internal control plays an important role in suppressing real earnings management behavior.In addition,a reasonable equity structure can form effective supervision and control between shareholders and management,promote the construction of internal control,and thus inhibit real earnings management behavior.There is a close relationship between internal control,real earnings management,and equity structure.Therefore,this paper takes the empirical research on Chinese listed manufacturing companies in Shanghai and Shenzhen A Shares from 2015-2017,firstly introduces the principal-agent theory,information asymmetry theory,stakeholder theory,interest synergy and interest encroachment theory,and analyzes the internals on this basis.The path of influence of control,real earnings management,and equity structure is proposed,and research hypotheses are proposed.Then empirical research design is carried out,with internal control as the explanatory variable,real earnings management as the explanatory variable,equity structure as the adjustment variable,and then empirically testing the impact of internal control on real earnings management,and the adjustment of ownership structure to the relationship between the two.According to the results of the empirical test,the corresponding policy recommendations are proposed.The conclusions of this paper indicate that:(1)internal control is negatively correlated with real earnings management,that is,good internal control can inhibit real earnings management;(2)negative concentration relationship between internal control and real earnings management,ie equity concentration The higher the degree,the lower the internal control's suppression of real earnings management;(3)the equity balance degree strengthens the negative relationship between internal control and real earnings management,that is,the higher the equity balance,strengthens the suppression of internal control on real earnings management;(4)Compared with non-state-owned enterprises,state-owned enterprises will reduce the inhibition of internal control on real earnings management.On the basis of the empirical research conclusions,the paper further proposes policy recommendations to strengthen internal control norms,build a diversified shareholding structure,improve the earnings information disclosure system,establish manager incentives and restraint mechanisms,and construct a small and medium shareholder protection mechanism.In order to make suggestions for reducing the real earnings management behavior of listed companies in China's manufacturing industry.