Executive's Alteration and Earnings Management under Corporate Governance Structure

摘要

The corporate governance structure plays an important role on earnings management. Based on the consideration of the relation between corporate governance and earnings management, this paper make an empirical study on the earnings management behavior before the changing and leaving of chairman and general manager in the listed companies. The research result shows that chairman will take the action of increasing profits the one or two year before the routine turnover, with the evidence being more significant in the last year than the next-to-last year. There is no evidence which shows departing general manager increases discretionary accruals before routine turnover. At the same time, perfect governance mechanism can successfully mitigate the earning management caused by chairman's normal turnover. So it is pressing to optimize governance mechanism in the company and establish long-term reputation mechanism in top management market.