شواهدی تجربی از ارتباط حاکمیت شرکتی، مدیریت سود و IFRS در شرکت های چینی عضو بورس

This research used 1,329 Chinese publicly listed companies’ data from 1998 to 2009 to investigate how IFRS, state ownership, and board of directors (BOD) influence earnings management. We conclude that state-ownership to an extent discourages earnings management in the current environment of China. However, IFRS implementation does not seem to deter earnings management. When state-ownership is not the case, increasing the number of independent BOD seems to be a good practice to discourage earnings management, although non-independent BOD does not make any difference.

According to the IASB, over 100 countries have adopted the international accounting standards officially known as International Financial Reporting Standards or IFRS.2 The United States is scheduled to decide sometime in 2011 about whether to incorporate IFRS into the financial reporting system for U.S. issuers3 With the possibility of global adoption of IFRS imminent, this seems an opportune time to investigate the effects of IFRS on various issues. Several researchers have approached this topic from several different angles, e.g., IFRS's impact on earnings management; the relationship between IFRS and information asymmetry (Leuz, 2003); how IFRS affects the cost of equity capital (Daske, 2006 and Lambert et al., 2007); whether IFRS improves market liquidity (Daske, Hail, Leuz, & Verdi, 2008); and how IFRS affects Tobin's q, which measures effects beyond the cost of capital and market liquidity (Daske et al., 2008). This paper investigates the effect of state ownership, IFRS, and independent boards of directors on earnings management in the context of Chinese publicly listed companies. The investment market of China has undergone some major changes over the years, including the establishment of an independent board of directors system in 2001 and the conversion to IFRS in 2007. China mandated IFRS conversion for publicly traded companies starting 1/1/2007.4 China's approach is a principles-based approach to translate the new rules into its own code, the Chinese Accounting Standards System. The revisions bring Chinese standards closer to the IFRS benchmark of internationally recognized quality, but the new standards will not be word-for-word translations of IFRS, though they will be founded on similar principles. A few differences are highlighted below: • The application of fair value will be tailored for a country where the government retains significant influence and free markets have not fully developed. • Related party disclosure requirements will be modified to reflect the context of state-ownership. State enterprises will be exempt from the "related-party" disclosure provisions because of the dominance of government enterprises. • There will be no ability to reverse impairment charges. In 2001, the China Securities Regulatory Commission issued, “Directory about establishing an independent board of directors system in listed Companies”. According to the directory, by 6/30/2003, at least one-third of the members of the board of directors should be independent. The intension is that the independent board of directors system will become a formal mechanism to monitor the behavior of and improve the corporate governance of Chinese domestically listed companies. How have the above changes influenced the investment market of China? We look at it from the perspective of earnings management. Can an independent board of directors improve corporate governance, and thus reduce earnings management? Bebchuk and Hamdani (2009) pointed out that good corporate governance practices at a publicly held firm will not necessarily be good practices at a publicly traded firm in which there is a controlling shareholder. This is because board independence, a key concept in structuring appropriate corporate governance practices, has a different meaning when a controlling shareholder is present. The research by Bebchuk and Hamdani (2009) inspired us to investigate the relationship between independent boards of directors and state ownership of Chinese domestically listed companies. The significant change of accounting system starting 2007 also demands this research to evaluate IFRS effect on the interaction of independent board of directors, earnings management, and state ownership.

We do not find evidence that IFRS implementation deters earnings management, after taking into consideration state ownership levels. Significant state ownership significantly decreases earnings management. For companies without significant state ownership, independent BOD significantly decreases earnings management, while non-independent BOD does not. When significant state ownership exists, BOD does not make a difference on earnings management. Size is a deterring factor of earnings management. Earnings management goes down with size. Age is an encouraging factor of earnings management. Earnings management goes up with age. To sum up, in the current environment of China, state-ownership to an extent discourages earnings management. This finding is consistent with Li (2010), Shen and Chen (2009) and Sueyoshi, Goto, and Omi (2010). However, IFRS implementation does not seem to deter earnings management. When state-ownership is not the case, increasing the number of independent BOD seems to be a good practice to discourage earnings management. Thus, the rules requiring at least 1/3 of the members of the BOD to be outside directors seem to be effective for private companies.