Corporate Governance Structure and Accounting Information Disclosure Quality: Evidence from Shenzhen Stock Exchange in China

Abstract

This study investigates the effect of corporate governance structure on the quality of accounting information disclosure using Shenzhen stock exchange data. Existing literatures reported that corporate governance can help to improve accounting quality. However, China's corporate governance structure may have different consequences from prior studies because it has less maturity than developed countries in Europe and the United States. China government, in particular, has a very strong influence on the companies in China and we needs to be verified if the corporate governance structure works properly. From the empirical tests, we find that the proportion of stateowned shares, the proportion of tradable shares, ownership concentration, the size of the board of directors, the proportion of ownership of the board of directors, and size of the board of supervisors are positively associated with the quality of accounting information disclosure. This study will contribute to academics and practitioners by documenting the factors of corporate governance structure on accounting disclosure quality in China.

Audit Quality And Earnings Management: Evidence From Shanghai Stock Market In China

“…Prior studies reported that managers perform earnings management primarily for the purpose of enhancing their interests instead of stockholders' wealth (Dechow, Sloan & Sweeney, 1995;Rhee, Sloan & Sweeney, 2012;Rhee, Yoo & Cha, 2016). However, in the case of Chinese companies, they also have a more unique purpose in carrying out earnings management under socialist conditions (Liu & Lu, 2007;Zho, Choi & Yeom, 2013;Xu & Rhee, 2018). China is a socialist country and very distinct from capitalist countries.…”

“…China is a socialist country and very distinct from capitalist countries. Chinese government can intervene more actively in its stock market than other capitalist government (Xu & Rhee, 2018). In this situation, Chinese companies are under high-level supervision from the Chinese government and need to maintain good relations with the government in order to run their business well.…”