Traditional corporate governance theory holds that the principal contradiction of corporate agency problem is the conflict of interests between external investors and management, which is called "Bailey-Mean Proposition" (Bide and Mean,1932; Zhan Sen and meckling, 1976). Shleifer and Vishny( 1997) and La Port et al. (1998, 1999) found that the ownership structure of modern companies is completely different from the widely accepted "Bailey-mean proposition". When the ownership concentration reaches a certain level, the controlling shareholder can effectively control the enterprise, and the most basic agency problem will be the conflict between investors and managers. The traditional situation of "decentralized ownership" and separation of the two rights is not the mainstream state of the ownership structure of modern companies, and a considerable part of the ownership structure of modern companies presents the characteristics of controlling by major shareholders (Faccio and Lang, 2002; Lemmon and Lins, 2003; Claessens et al., 2000). Therefore, under the corporate governance system, there are conflicts of interest between owners and operators, major shareholders and minor shareholders in the principal-agent relationship in the process of enterprise operation. On the other hand, the conflict of interest between major shareholders and minor shareholders is manifested in the disclosure of accounting information: major shareholders, especially controlling major shareholders, not only have information advantages, but also have the power to make major decisions and actually manipulate. All these provide the necessary conditions for them to conduct unfair transactions and seize illegitimate interests. When major shareholders need to conceal their unfair transactions, they can also use their control over the company to provide false accounting information to relevant stakeholders. Therefore, from the institutional basis of accounting information distortion, it can be seen that accounting information distortion is essentially a form of expression in which operators and major shareholders infringe on the interests of related parties of the company.
Since Shleifer and Vishny( 1997) concluded in their famous summary that "when the controlling shareholders control almost all the control rights of the company, they are more inclined to grab the private interests of the control rights, which the minority shareholders cannot share", more and more scholars have found that the controlling shareholders are not conducive to corporate governance. The research of Leuz, Nanda, Wysc and CKI (2003) shows that there is a significant correlation between earnings management and the private benefits obtained by controlling shareholders in order to seize control. The existence of controlling shareholders' meeting in enterprises worsens corporate governance and intensifies earnings management. Because the major shareholder has mastered the internal information that the external investors can't know, there is a serious information asymmetry between the major shareholder and the external investors, and the major shareholder has a strong motive to conceal and mislead the external investors by manipulating the reported profits (Teoh,1998; Fan and Huang, 2002). La Porta et al. (1998) found that the concentration of ownership is negatively related to the quality of financial reports, and the large shareholders will control and plunder the wealth of the small shareholders with the help of distorted accounting information to some extent. Fan Hewang (2002) studied the relationship between ownership structure and accounting earnings information, and found that the separation of control rights and cash flow rights led to agency conflicts between controlling shareholders and external investors. Controlling shareholders disclose accounting earnings information according to their own preferences and interests, which leads to the loss of credibility of earnings reports by external investors and weakens the information content of corporate earnings reports. Haw et al. (2003) studied the relationship between the ultimate control right of major shareholders and earnings management in nine countries in East Asia and three countries in Western Europe 13, and found that the main reason of earnings management lies in the separation of control right and cash flow right of major shareholders, and the degree of legal protection of investors' interests is negatively related to earnings management. Both formal and informal legal systems can restrain the earnings management behavior of major shareholders. Leuz et al. (2003) systematically studied the phenomenon of corporate earnings management in 365,438+0 countries, and found that the difference of earnings management was caused by the large shareholders trying to obtain private income. Through earnings management, we can hide the real performance of enterprises from external investors, thus misleading and infringing on external investors. There is an endogenous relationship between the ownership structure and the quality of earnings reports.
Second, earnings management behavior under the control of major shareholders of listed companies in China
China's listed companies are in a state of super control by major shareholders, and the shareholding ratio of the largest shareholder is above 40% on average, so major shareholders are rarely challenged and resisted by other shareholders in company decision-making (Qiao Liu and Lu Zhou, 2004). With the control right, major shareholders can obtain private interests through equity refinancing, and even directly transfer the wealth of listed companies through the "tunnel effect". The conflict of interests between major shareholders and external investors leads to the possibility that major shareholders may use earnings management for personal gain. Under the background of imperfect legal system and low degree of investor protection, the control right of major shareholders has a very important influence on the earnings management behavior of listed companies in China. By virtue of its control position, major shareholders control the management of the company, forcing the board of directors and the management to handle the company affairs according to their own wishes, and choose the appropriate time to manipulate profits according to their needs. For example, when a listed company issues shares, major shareholders will use various earnings management methods to increase the price of the shares in order to obtain more disposable capital. At the time of rights issue.
Paper Keywords: controlling shareholder equity transfer earnings management
This paper first analyzes the freedom of earnings management provided by the control of major shareholders, then reviews the research on earnings management behavior under the control of major shareholders of listed companies in China, and finally analyzes the motivation of earnings management for controlling shareholders to transfer shares in detail.
First of all, the control of the largest shareholder provides the freedom of earnings management.
Traditional corporate governance theory holds that the principal contradiction of corporate agency problem is the conflict of interests between external investors and management, which is called "Bailey-Mean Proposition" (Bide and Mean,1932; Zhan Sen and meckling, 1976). Shleifer and Vishny( 1997) and La Port et al. (1998, 1999) found that the ownership structure of modern companies is completely different from the widely accepted "Bailey-mean proposition". When the ownership concentration reaches a certain level, the controlling shareholder can effectively control the enterprise, and the most basic agency problem will be the conflict between investors and managers. The traditional situation of "decentralized ownership" and separation of the two rights is not the mainstream state of the ownership structure of modern companies, and a considerable part of the ownership structure of modern companies presents the characteristics of controlling by major shareholders (Faccio and Lang, 2002; Lemmon and Lins, 2003; Claessens et al., 2000). Therefore, under the corporate governance system, there are conflicts of interest between owners and operators, major shareholders and minor shareholders in the principal-agent relationship in the process of enterprise operation. On the other hand, the conflict of interest between major shareholders and minor shareholders is manifested in the disclosure of accounting information: major shareholders, especially controlling major shareholders, not only have information advantages, but also have the power to make major decisions and actually manipulate. All these provide the necessary conditions for them to conduct unfair transactions and seize illegitimate interests. When major shareholders need to conceal their unfair transactions, they can also use their control over the company to provide false accounting information to relevant stakeholders. Therefore, from the institutional basis of accounting information distortion, it can be seen that accounting information distortion is essentially a form of expression in which operators and major shareholders infringe on the interests of related parties of the company.
Since Shleifer and Vishny( 1997) concluded in their famous summary that "when the controlling shareholders control almost all the control rights of the company, they are more inclined to grab the private interests of the control rights, which the minority shareholders cannot share", more and more scholars have found that the controlling shareholders are not conducive to corporate governance. The research of Leuz, Nanda, Wysc and CKI (2003) shows that there is a significant correlation between earnings management and the private benefits obtained by controlling shareholders in order to seize control.
The existence of controlling shareholders' meeting in enterprises worsens corporate governance and intensifies earnings management. Because the major shareholder has mastered the internal information that the external investors can't know, there is a serious information asymmetry between the major shareholder and the external investors, and the major shareholder has a strong motive to conceal and mislead the external investors by manipulating the reported profits (Teoh,1998; Fan and Huang, 2002). La Porta et al. (1998) found that the concentration of ownership is negatively related to the quality of financial reports, and the large shareholders will control and plunder the wealth of the small shareholders with the help of distorted accounting information to some extent. Fan Hewang (2002) studied the relationship between ownership structure and accounting earnings information, and found that the separation of control rights and cash flow rights led to agency conflicts between controlling shareholders and external investors. Controlling shareholders disclose accounting earnings information according to their own preferences and interests, which leads to the loss of credibility of earnings reports by external investors and weakens the information content of corporate earnings reports. Haw et al. (2003) studied the relationship between the ultimate control right of major shareholders and earnings management in nine countries in East Asia and three countries in Western Europe 13, and found that the main reason of earnings management lies in the separation of control right and cash flow right of major shareholders, and the degree of legal protection of investors' interests is negatively related to earnings management. Both formal and informal legal systems can restrain the earnings management behavior of major shareholders. Leuz et al. (2003) systematically studied the phenomenon of corporate earnings management in 365,438+0 countries, and found that the difference of earnings management was caused by the large shareholders trying to obtain private income. Through earnings management, we can hide the real performance of enterprises from external investors, thus misleading and infringing on external investors. There is an endogenous relationship between the ownership structure and the quality of earnings reports.
Second, earnings management behavior under the control of major shareholders of listed companies in China
China's listed companies are in a state of super control by major shareholders, and the shareholding ratio of the largest shareholder is above 40% on average, so major shareholders are rarely challenged and resisted by other shareholders in company decision-making (Qiao Liu and Lu Zhou, 2004). With the control right, major shareholders can obtain private interests through equity refinancing, and even directly transfer the wealth of listed companies through the "tunnel effect". The conflict of interests between major shareholders and external investors leads to the possibility that major shareholders may use earnings management for personal gain. Under the background of imperfect legal system and low degree of investor protection, the control right of major shareholders has a very important influence on the earnings management behavior of listed companies in China. By virtue of its control position, major shareholders control the management of the company, forcing the board of directors and the management to handle the company affairs according to their own wishes, and choose the appropriate time to manipulate profits according to their needs. For example, when a listed company issues shares, major shareholders will not hesitate to use various earnings management methods to increase the selling price of the shares in order to obtain more disposable capital. At the time of rights issue.
Paper Keywords: controlling shareholder equity transfer earnings management
This paper first analyzes the freedom of earnings management provided by the control of major shareholders, then reviews the research on earnings management behavior under the control of major shareholders of listed companies in China, and finally analyzes the motivation of earnings management for controlling shareholders to transfer shares in detail.
First of all, the control of the largest shareholder provides the freedom of earnings management.
Traditional corporate governance theory holds that the principal contradiction of corporate agency problem is the conflict of interests between external investors and management, which is called "Bailey-Mean Proposition" (Bide and Mean,1932; Zhan Sen and meckling, 1976). Shleifer and Vishny( 1997) and La Port et al. (1998, 1999) found that the ownership structure of modern companies is completely different from the widely accepted "Bailey-mean proposition". When the ownership concentration reaches a certain level, the controlling shareholder can effectively control the enterprise, and the most basic agency problem will be the conflict between investors and managers. The traditional situation of "decentralized ownership" and separation of the two rights is not the mainstream state of the ownership structure of modern companies, and a considerable part of the ownership structure of modern companies presents the characteristics of controlling by major shareholders (Faccio and Lang, 2002; Lemmon and Lins, 2003; Claessens et al., 2000). Therefore, under the corporate governance system, there are conflicts of interest between owners and operators, major shareholders and minor shareholders in the principal-agent relationship in the process of enterprise operation. On the other hand, the conflict of interest between major shareholders and minor shareholders is manifested in the disclosure of accounting information: major shareholders, especially controlling major shareholders, not only have information advantages, but also have the power to make major decisions and actually manipulate. All these provide the necessary conditions for them to conduct unfair transactions and seize illegitimate interests. When major shareholders need to conceal their unfair transactions, they can also use their control over the company to provide false accounting information to relevant stakeholders. Therefore, from the institutional basis of accounting information distortion, it can be seen that accounting information distortion is essentially a form of expression in which operators and major shareholders infringe on the interests of related parties of the company.
Since Shleifer and Vishny( 1997) concluded in their famous summary that "when the controlling shareholders control almost all the control rights of the company, they are more inclined to grab the private interests of the control rights, which the minority shareholders cannot share", more and more scholars have found that the controlling shareholders are not conducive to corporate governance. The research of Leuz, Nanda, Wysc and CKI (2003) shows that there is a significant correlation between earnings management and the private benefits obtained by controlling shareholders in order to seize control. The existence of controlling shareholders' meeting in enterprises worsens corporate governance and intensifies earnings management. Because the major shareholder has mastered the internal information that the external investors can't know, there is a serious information asymmetry between the major shareholder and the external investors, and the major shareholder has a strong motive to conceal and mislead the external investors by manipulating the reported profits (Teoh,1998; Fan and Huang, 2002). La Porta et al. (1998) found that the concentration of ownership is negatively related to the quality of financial reports, and the large shareholders will control and plunder the wealth of the small shareholders with the help of distorted accounting information to some extent. Fan Hewang (2002) studied the relationship between ownership structure and accounting earnings information, and found that the separation of control rights and cash flow rights led to agency conflicts between controlling shareholders and external investors. Controlling shareholders disclose accounting earnings information according to their own preferences and interests, which leads to the loss of credibility of earnings reports by external investors and weakens the information content of corporate earnings reports. Haw et al. (2003) studied the relationship between the ultimate control right of major shareholders and earnings management in nine countries in East Asia and three countries in Western Europe 13, and found that the main reason of earnings management lies in the separation of control right and cash flow right of major shareholders, and the degree of legal protection of investors' interests is negatively related to earnings management, and both formal and informal legal systems can restrain the earnings management behavior of major shareholders. Leuz et al. (2003) systematically studied the phenomenon of corporate earnings management in 365,438+0 countries, and found that the difference of earnings management was caused by the large shareholders trying to obtain private income. Through earnings management, we can hide the real performance of enterprises from external investors, thus misleading and infringing on external investors. There is an endogenous relationship between the ownership structure and the quality of earnings reports.
Second, earnings management behavior under the control of major shareholders of listed companies in China
China's listed companies are in a state of super control by major shareholders, and the proportion of the largest shareholder is above 40% on average. In corporate decision-making, major shareholders are rarely challenged and resisted by other shareholders (Qiao Liu and Lu Zhou, 2004). With the control right, major shareholders can obtain private interests through equity refinancing, and even directly transfer the wealth of listed companies through the "tunnel effect". The conflict of interests between major shareholders and external investors leads to the possibility that major shareholders may use earnings management for personal gain. Under the background of imperfect legal system and low degree of investor protection, the control right of major shareholders has a very important influence on the earnings management behavior of listed companies in China. By virtue of its control position, major shareholders control the management of the company, forcing the board of directors and the management to handle the company affairs according to their own wishes, and choose the appropriate time to manipulate profits according to their needs. & lt/P & lt； & gt