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Capital Market Opening And Classification Shifting Earnings Management

Posted on:2023-06-20Degree:MasterType:Thesis
Country:ChinaCandidate:Y N BaiFull Text:PDF
GTID:2569306806491454Subject:Business Administration
Abstract/Summary:PDF Full Text Request
Since China’s Securities Regulatory Commission issued standards requiring listed companies to timely disclose non-recurring profits and losses in the annual report.This index is widely used in the business activities of enterprises,The related net profit after deducting non-recurring profit and losses(hereinafter referred to as net profit after deducting)has been paid more and more attention.Therefore,in order to adjust the core earnings,the misclassification of current and non-current items has become an important means for managers to manage earnings.However,the false increase of core earnings will have a negative impact on investors,analysts and other accounting information users to correctly understand the earnings information of the company,thus misleading investors to judge the company’s future operating conditions,and then lead to investors to overprice the company’s stock and damage the interests of investors.In this context,how to restrict managers’ classification shifting earnings management behavior and better protect investors’ interests has gradually attracted the attention of scholars.At present,domestic and foreign scholars have conducted some discussions on the influencing factors of classification shifting earnings management,but few scholars pay attention to the important external governance mechanism of capital market opening.As a typical representative of capital market opening,Mainland-Hong Kong Stock Connect provides a new way for two-way opening of China’s capital market.It not only absorbs a large amount of overseas capital,but also introduces overseas investors into the A-share market,which helps to improve the investor structure,strengthen the supervision and governance role of overseas investors,and improve the efficiency of resource allocation in the capital market.Therefore,based on information asymmetry and principal-agent theory,this paper combines theoretical analysis with empirical analysis.Taking the implementation of the Mainland-Hong Kong Stock Connect system as a quasi-natural experiment,the dual difference model is adopted to analyze the influence of capital market opening on classification shifting earnings management behavior.Furthermore,heterogeneity test was conducted based on ownership concentration and audit supervision to enrich the research results.Then,the influence mechanism of capital market opening on classification transfer earnings management is tested by measuring enterprise information environment with analyst attention and enterprise governance mechanism with agency cost.The research conclusions are as follows: First,after the opening of the capital market,it can effectively restrain the earnings management behavior of classification shifting.Second,from the perspective of heterogeneity test,in companies with lower ownership concentration and poorer audit supervision,capital market opening has a more significant inhibiting effect on classification shifting earnings management.Third,from the perspective of impact mechanism,capital market opening can restrain classification shifting behavior of enterprises by improving the information channel of information environment and optimizing the governance channel of corporate governance mechanism.The main innovations are as follows: First,starting from the external governance mechanism of capital market opening,it enriches the research results on the influencing factors of classification shifting earnings management.Second,from the perspective of classification shifting earnings management,it broadens the research depth of capital market opening at the micro level.Third,it complements the transmission mechanism between capital market opening and classification shifting earnings management.Based on the above conclusions,this paper puts forward relevant suggestions.First,we should gradually expand the market opening within the scope of controllable risks,and unswervingly follow the road of capital market opening.We will standardize the investor protection system,stock trading operations and other relevant systems to provide a better trading environment for overseas investors.Second,we should improve the professional ability of information intermediaries such as analysts and auditors,strengthen the cultivation of information intermediaries,strengthen the supervision and inspection of abnormal core profits of enterprises,and optimize the information environment of enterprises.Thirdly,it is necessary to strengthen the market education and guidance of enterprises,strengthen the awareness of information disclosure,improve the internal and external governance mechanism of enterprises,and enhance the level of governance.At the same time,regulators should improve the supervision system,strengthen the supervision and management of enterprises,increase the cost of illegal behaviors,and intensify the investigation and punishment of illegal behaviors.Fourth,we should guide general investors to learn professional investment knowledge,pay attention to non recurring profits and losses,enhance risk prevention awareness,and cultivate value investment philosophy.
Keywords/Search Tags:capital market opening, Mainland-Hong Kong Stock Connect, classification shifting earnings management, difference-in-differences model
PDF Full Text Request
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