The Influence Of Corporate Integrity Culture On Earnings Management

In the process of enterprise development,the internal construction of enterprise culture will have a subtle.impact on its production and operation,and standardize the ethics and behavior of employees,which is the enterprise’s integrity culture.Maintaining integrity is the economic basis for the development of capital market economy and the basic lifeline for enterprises to maintain their survival and development in the extremely fierce market competition.This is a very important informal system,which can reduce the moral hazard of enterprises,reduce the transaction cost of enterprises,improve the work efficiency of organizations,and then promote the economic development of the overall capital market.In the critical period of China’s economic transformation,building a good credit cultural atmosphere and environment has become one of the important strategic tasks of national development.At the same time,some objective external economic factors will lead to the fluctuation of enterprise earnings management,which can not be controlled by enterprises,such as the economic environment under the epidemic,the nature of enterprise property rights,the company’s industry background,and the type of main business products.Even if the enterprise benefit can maintain a relatively stable state most of the time,it is inevitable to achieve a long-term stable state of surplus.A series of external factors beyond the control of enterprises will also affect the profits of enterprises to a certain extent.However,enterprises can control their profits through internal factors,such as the internal asset structure,the quality of financial information and the construction of internal control,so as to overcome external objective factors and balance enterprise performance.This requires enterprises to have good self-discipline to ensure the quality of earnings management.Therefore,this paper examines the impact of the construction of corporate integrity culture on earnings management behavior.This paper takes A-share listed companies in Shanghai and Shenzhen stock market from 2016 to 2020 as a sample for data analysis and empirical research.The quality of information disclosure,litigation and punishment of enterprises in Shanghai and Shenzhen stock exchange measure the construction degree of enterprise integrity culture,and effectively identify the impact of "integrity" oriented enterprise culture on earnings management behavior by constructing OLS regression model.And explore the impact of corporate integrity culture on Earnings Management under the two variable action mechanism of the effectiveness of corporate internal control and the fair value measurement of assets.Heckman’s two-stage treatment effect model is adopted to correct the endogenous deviation that may be caused by the measurement of integrity culture,and the companies with different enterprise properties are analyzed.The results of this study show that the corporate integrity culture can significantly inhibit the actual earnings management behavior and accrued earnings management behavior of enterprises.The more honest the enterprise pays more attention to internal control,the management will manipulate earnings management more scientifically and truly,and then the enterprise’s integrity culture will negatively affect earnings management behavior.The more honest an enterprise is,the more rigorous and prudent it will use accounting information in the application of fair value measurement.It will try to truly reflect the business of the enterprise rather than focus on earnings management.Therefore,when enterprises use fair value measurement,enterprises with higher integrity will significantly inhibit earnings management behavior.This paper combines the research conclusions and gives some suggestions:strengthen the construction and promotion of corporate integrity culture;Enterprises can improve the effectiveness of internal control through digital construction;Strengthen the quality of financial information disclosure,improve and perfect the capital market environment in line with fair value,etc.