Board Independence, Family Control and Earnings Management-Based on empirical research on listed companies in Shanghai and Shenzhen Stock Markets

Abstract

In the research on the impact of board independence on corporate earnings management, few existing literatures discuss the impact of family control on the relationship between the two. Based on the panel data of Shanghai and Shenzhen listed companies from 2015 to 2019, this paper aims to empirically analyze the impact of board independence on corporate earnings management, and explores the moderating effect of family enterprise and corporate family control on each impact path. The main conclusions are as follows: the increase of the proportion of independent directors to the total number of directors does not affect the accrued earnings management, but promotes the degree of real earnings management behavior, and the two-duty separation of chairman and CEO can effectively inhibit the occurrence of the two types of earnings management. In family firms, the influence of the proportion of independent directors on real earnings management is limited, and the moderating effect of this inhibition is more significant with the increase of corporate family control. The research conclusions of this paper provide reference for the study of the relationship between board independence, family control and earnings management, and provide suggestions for the innovation of corporate governance mechanism and supervision system.