Research On The Impact Of Digital Transformation On Enterprise Earnings Management

With the rapid development of global information technology,business models of enterprises have also been updated.Digital transformation of enterprises has become an important way for traditional enterprises to continuously develop.Enterprises improve their competitiveness through digital transformation and conform to the trend of the times.At present,some foreign enterprises have made some achievements through digital transformation,such as Wal Mart,Procter&Gamble,Nestle,Tesla and other world giants.Their business model transformation is a successful case of digital transformation.However,due to the inconsistent environment and national conditions,Chinese enterprises have their own development characteristics in digital transformation.In recent years,due to the development of China’s capital market,earnings management issues in listed company reports have attracted widespread attention from all walks of life.There are few academic studies on the impact of digital transformation on earnings management.Therefore,this article will explore the impact of digital transformation on earnings management in Chinese enterprises from both internal transmission mechanisms and external environmental factors.Based on contract theory,information asymmetry theory,transaction cost theory,and dynamic capability theory,this article uses A-share listed companies from 2011 to2020 as research samples to explore the impact of digital transformation on earnings management through theoretical analysis and empirical research.Firstly,this paper conducts benchmark regression on the relationship between digital transformation and corporate earnings management,and tests the robustness through lag explanatory variables,replacement explanatory variables,Heckman two-stage model,and instrumental variable methods;Secondly,this paper examines the mechanism and path of the impact of digital transformation on corporate earnings management,and adds environmental uncertainty as a moderator to explore the moderating role of external environmental factors between the two;Finally,the sample is divided by industry nature,geographical nature,and enterprise size to study the differences in the impact of digital transformation on enterprise earnings management.Based on the empirical results of this article,the following conclusions are drawn:(1)Digital transformation can drive the reduction of earnings management in enterprises.Further research has found that this driving effect is more evident in the secondary and tertiary industries,eastern and western regions,and larger enterprises;(2)The intermediary effect results show that digital transformation can reduce earnings management by reducing the concentration of a company’s supply chain and improving the quality of company information disclosure;(3)The degree of uncertainty in the enterprise’s external environment will enhance the negative impact of digital transformation on earnings management.This article not only further enriches the research on the impact of digital transformation on earnings management,but also supplements the research on factors affecting earnings management,providing a reference basis for the formulation and implementation of enterprise digital transformation and business strategic models,which has certain theoretical and practical guiding significance.