Study on the Relationship Between Managerial Power and the Quality of Accounting Information
Accounting information is one of the important factories for investors to make the investment decision, because its quality will affect the efficiency and effect of investment decision largely. When the executive of the enterprise have a larger power, the
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Abstract Accounting information is one of the important factories for investors to make the investment decision, because its quality will affect the efficiency and effect of investment decision largely. When the executive of the enterprise have a larger power, they maybe use their power to control the generation of accounting information for their own benefits. So it is necessary to explore the relationship between managerial power and the quality of accounting information of the enterprise in this market background. Based on companies from 2008 to 2013 in China as research objects, this paper explored managerial power’s influence on the quality of accounting information by empirical analysis method, and concluded that managerial power has a significant impact on the quality of accounting information. In specific, the greater the managerial power, the greater degree of earnings management and the worse quality of accounting information disclosure. This means that, if we want to enhance the quality of accounting information, we have to establish a sound corporate governance structure, to promote the company’s chairman and general manager of the two jobs to separate by regulation, strengthen the constraints on managerial power, thereby to increase the transparency of their accounting information, accelerate the resource allocation efficiency of capital markets, and to further improve the effectiveness of China’s capital market.
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Keywords Managerial power The quality of accounting information management The quality of accounting information disclosure
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Y. Sun (✉) ⋅ D. Lu Economy and Management College, China Petroleum University, Qingdao 266580, Shandong, China e-mail: [email protected] © Springer Science+Business Media Singapore 2017 X. Li and X. Xu (eds.), Proceedings of the Fourth International Forum on Decision Sciences, Uncertainty and Operations Research, DOI 10.1007/978-981-10-2920-2_6
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Y. Sun and D. Lu
1 Introduction Accounting information is one of the important factories for investors to make the investment decisions, because its quality will largely affect the efficiency and effect of investment decision. Investors need to make the right judgments, and all this will base on the quality of accounting information. Whether it is state-owned enterprise or private enterprise, when the executive of the enterprise have a greater power and have absolute influence to the resources of enterprise, they maybe use their power to control the generation of accounting information for their own benefits. In such circumstances, studying on the relationship between managerial power and the quality of accounting information has great theoretical value and practical significance to improve the transparency of accounting information and promote the effectiveness of capital market. The paper selects listed companies of Shanghai and Shenzhen A stock market in 2008–2013 as sample, studied on enterprise managerial power of enterprise the quality of accounting information can bring the positive or negative role,and
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