Institutional Investors Holdings on Earnings Management Market Reaction Intensity Affect Study

Individual investors are often difficult to recognize the earnings management behavior from accounting data. Institutional investors as investment experts, if they have the ability to recognize earning management and put it into the market price mechanism has become the focus of attention. We examined the relationship between the sample stocks' cumulative abnormal returns and earnings management. Finding a negative association between unexpected discretionary accruals and cumulative abnormal returns in the group of institutional holding higher. Show that institutional investors can identify the earnings management and put it into the market price mechanism.