Effect On Earnings Management By High-speed Railway On The Perspective Of The Independent Directors Under Control

As the most representative field of China’s "new four major inventions",the high-speed rail has now become an important link for urban information transmission.The high-speed rail network layout has broken the spatial barriers between regions and accelerated the cross-regional flow of resource elements such as people,wealth,and materials.As a cell of market life,an enterprise cannot develop without information elements such as information,people,finances,and things.Therefore,the opening of high-speed rail will inevitably have an impact on corporate governance.At the moment,earnings management is a common phenomenon in corporate governance,and it is the earnings whitewashing behavior that management takes advantage of the information to the disclosed statements.Therefore,the changes in resource elements brought about by the opening of the high-speed railway will inevitably have an impact on the company’s earnings management.As an important participant in corporate governance,independent directors can use their professional knowledge and the information they have obtained to supervise the company’s management and suppress its earnings management behavior.However,due to the different social network positions of local independent directors and remote independent directors,there are great differences in independence,information and supervision costs.Therefore,the two have a different effect on suppressing the earnings management of listed companies.The time and space compression effect brought about by the opening of the high-speed rail will greatly weaken the information and supervision disadvantages of independent directors in different places,and will have an impact on management’s earnings disclosure behavior.Therefore,in order to verify the impact of high-speed rail opening on corporate earnings management from the perspective of independent director governance,this paper selects 2007 to 2018 as the observation period,and first examines the impact of high-speed rail opening on corporate earnings management.The study found that the opening of high-speed rail in the city where the company is located will reduce the accrued earnings management and real earnings management of listed companies.Secondly,compared with local independent directors,independent directors in different places can reduce the accrued earnings management of listed companies,and have no significant inhibitory effect on real earnings management.Moreover,after the high-speed rail is opened in the city where the company is located,the independent directors in different places can further suppress the accrued earnings management ofthe listed company,and also have a significant inhibitory effect on the real earnings management.A study on its mechanism of action found that the opening of high-speed rail improves the supervision and governance of listed companies by increasing the attendance rate of independent directors in different locations,and thus effectively suppresses the management’s earnings disclosure.The evidence in this paper shows that the opening of the high-speed rail in the city where the enterprise is located can inhibit the management of earnings manipulation by affecting the governance of independent directors in different places,adding new empirical evidence for the impact of high-speed rail on corporate governance,and further enriching the economics and corporate governance of high-speed rail Research.At the same time,it provides corresponding policy recommendations for the improvement of transportation infrastructure and corporate governance.