Party Organizations' “two-way Entry And Cross-appointment” And Accounting Information Qualit

From political life,social governance to economic construction,the Communist Party of China(CPC)has always been in a key leadership position,guiding the vigorous development of various undertakings in our country.China’s unique approach to corporate governance involves integrating the Communist Party Organization into the construction of corporate governance mechanisms,a system often referred to as "Chinese red." This approach recognizes the Party’s leadership in societal development and allows for its involvement in guiding the operations of businesses to promote growth and social welfare.It reflects China’s inclusive and interconnected approach that recognizes the integrated role of government,Party,and society in promoting overall prosperity and well-being.By the end of 2021,there were 1.532 million grassroots party organizations of the CPC in enterprises across the country.These organizations have been constructed as required and represent a 3.7% increase compared to the end of 2019,with 55,000 newly established during this period.In fact,the academic community is very concerned about the topic of party organizations participating in corporate governance,but most of the existing researches analyze its impact on anti-corruption behavior,tax avoidance behavior,social responsibility,etc.,and few literature examine its impact on the quality of accounting information.Can enterprise systems with Chinese characteristics be considered a vital factor in promoting the quality of accounting information? If so,under what circumstances is this applicable? Furthermore,what is the influence mechanism involved? Based on the above problems,this thesis studies the relationship between the CPC’s Party organization "two-way entry,cross-employment",accounting information quality and internal control,and distinguishes the level of influence under different property rights,marketization processes,and management power situations.The focus of this research is to investigate how the CPC’s Party organization "two-way entry,cross-employment" affects the quality of accounting information in A-share listed companies from 2017 to 2021.It uses a two-way fixed-effect model that controls for industry and year and measures the quality of accounting information through accrual earnings management.The research also records data on "cross appointment and dual participation" to assess the involvement of the CPC in directing corporate governance.Furthermore,the study utilizes several theories,such as principal-agent theory,information asymmetry theory,high-level echelon theory,and path dependence theory,to gain insight into the institutional context of China.Based on the findings of the research,the active participation of the "two-way entry,cross-employment" in corporate governance has a positive impact on the quality of accounting information in companies.This positive effect is most noticeable in private enterprises and regions with lower degrees of marketization.However,when executive power is highly concentrated,the positive impact of "two-way entry,cross-employment" on accounting information quality is weakened.The study also found that internal control plays a partial mediating role in the relationship between the "two-way entry,cross-employment" and accounting information quality.Based on these results,recommendations for Chinese listed companies and relevant departments can be formulated to improve accounting information quality.In conclusion,this thesis presents a comprehensive analysis of the association between corporate governance involving the CPC’s Party organization "two-way entry,cross-employment" and accounting information quality.The study sheds light on the impact of various factors,including property rights,marketization,and management power,while also identifying the mediatory role of internal control.The results of this study contribute to our comprehension of the economic advantages associated with the CPC’s participation in enterprise governance.These findings also provide valuable insights into the evaluation of party organization involvement in top-level management,such as the board of directors and board of supervisors,from a scientific perspective.The study’s insights are particularly valuable for Chinese firms striving to adapt and excel in an ever-changing business environment,empowering them to pursue strategic reforms effectively while leveraging unique local systems.