Executive Academic Experience, Internal Control And Earning Quality

As an important indicator to measure the short-term income status and development level of the company,earnings quality often plays the role of “comprehensive target of corporate performance”,which is of great significance to both enterprises and investors.Therefore,the concern for earnings quality must not be less.According to the principal-agent theory and the high-level echelon theory,the executives as the actual managers of the company have a great impact on the company's decisions,and the quality of earnings is naturally affected by the characteristics of the executives.At present,domestic and foreign scholars mainly study the impact of executive auditing background,executives' military experience,executive gender,and executive returnee background on earnings quality.However,scholars have not systematically studied the influence mechanism of executives' academic experience on earnings quality.The academic experience of executives is different from the executive education,but it has a significant influence on the values,management concepts and management style of senior executives,especially in the context of the current society has entered the "knowledge society",the academic experience of executives is coming The more attention is paid,it has become a unique and common phenomenon in the capital market.This paper attempts to test the relationship between executives' academic experience,internal control and earnings quality,in order to expand the research horizon of executives' academic experience.Firstly,based on the high-level echelon theory,principal-agent theory and stakeholder theory,this paper makes a theoretical analysis of the relationship between executives' academic experience,internal control and earnings quality,and proposes the following two hypotheses:(1)Executives Academic experience can improve the quality of earnings of enterprises;(2)The academic experience of executives to improve the quality of corporate earnings is achieved by strengthening the internal control of enterprises,that is,internal control plays a mediating role.Secondly,this paper selects the 2008-2017 Shanghai-Shenzhen A-share listed companies as research samples,uses STATA software for correlation analysis and multiple regression analysis,empirically tests the above assumptions,and uses substitution variables,PSM analysis,instrumental variables.The method tests the regression results to ensure the reliability of the regression results.Thirdly,the paper also made three further analysis to explore the impact of different executive position differences,proportion of institutional ownership,whether for big four to audit and marketization degree on the research conclusions.Finally,the paper also extends the research conclusions to the economic consequences of the academic experience of executives,revealing the relationship between executives' academic experience and the risk of stock price collapse.The results of this paper show that:(1)the academic experience of senior executives will have a positive impact on the earnings quality of enterprises;(2)the improvement of earnings quality of executives' academic experience is achieved by strengthening internal control of enterprises;(3)The influence of executives' academic experience on internal control and earnings quality is mainly achieved through CEOs,CFOs can affect internal control and earnings quality,but not as significant as CEOs;(4)companies with low institutional shareholdings and non-four major audits,the academic experience of executives has a more significant effect on the improvement of earnings quality;(5)in areas with low marketization level,the academic experience of executives has a more significant effect on the improvement of earnings quality;(6)the academic experience of senior executives will reduce the enterprise's the stock price collapse risk.The research results of this paper help enterprises to hire senior executives,focus on the construction of senior management team,promote the diversification of senior management team,promote the establishment and implementation of internal control,improve the quality of corporate earnings and reduce corporate risks.At the same time,it also helps management to more comprehensively evaluate the company's earnings quality,which will help to introduce or improve relevant policies later.This paper incorporates the academic experience,internal control and earnings quality of executives into a research framework,enriches the literature on the academic and earnings quality of executives,broadens the scope of research on high-level echelon theory,and emphasizes the academic experience of executives within the enterprise.The role played by the governance process,and the research has certain practical value for promoting the diversification of the senior management team,enhancing the internal control level of the enterprise and improving the earnings quality of the enterprise.