Research on the correlation between affiliated management and earnings management - from the perspective of principal-agent theory
by Wenfei Cao; Chunyu Wang
International Journal of Chinese Culture and Management (IJCCM), Vol. 5, No. 2, 2022

Abstract: At present, the economic consequences of affiliated management (vertical interlocks of executives) are still controversial, and the research on the relationship between affiliated management and earnings management has not been in-depth. Based on this, the thesis takes 2014-2018 Chinese A-share listed companies as the research objects, and explores the correlation between affiliated management and the level of earnings management. The results of the study show that affiliated management can effectively suppress earnings management, especially the negative earnings management. Therefore, affiliated management can be used as an invisible supervision mechanism for large shareholders to the management, which can alleviate the principal-agent problem between them, and inhibit the adjustment behaviour of accounting profits.

Online publication date: Thu, 26-May-2022

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