Empirical Research of the Relationship between Characteristics of Supervisory Board and Earnings Quality

摘要

In recent years, financial statement fraud of listed companies is a deleterious cancer of security market, the quality of accounting information has become focus of the whole society. Based on the empirical analysis of the annual report of China's 160 listed companies in 2006, this paper makes an empirical study on the relationship of characteristics of supervisory board and earnings quality. The results indicate that there is no significant correlation between characteristics of supervisory board and earnings quality, as the independent supervisory organ in company's administration structure of our country, the board of supervisor has defects on system design and which has not played its due role in practice. We believe that, to some extent, it is the advantageous status of the management that has put supervisory board at a disadvantage. With the rise of professional managers and the expansion and growth of institutional investors, however, the “disadvantageous status” of supervisory board will be greatly improved. Therefore, during the course of improvement of the market economy in china, supervisor board system must be improved for a real effective supervision.