Title

Ownership, two-tier board structure, and the informativeness of earnings : evidence from China

Document Type

Journal article

Source Publication

Journal of Accounting and Public Policy

Publication Date

7-1-2007

Volume

26

Issue

4

First Page

463

Last Page

496

Keywords

Corporate governance, Informativeness of earnings, Ownership

Abstract

This study extends previous research by empirically examining how ownership, two-tier board structure, and auditor affect the informativeness of earnings for companies listed in China. We measure the informativeness of earnings by the earnings-returns relation, discretionary accruals, and audit opinion. The results show that ownership concentration, the presence of foreign shareholders, the percentage of tradable shares, the type of dominant shareholder, the supervisory board, and independent directors affect the earnings response coefficients and discretionary accruals. We also find that the type of dominant shareholder, the size of the supervisory board, and the percentage of independent directors have an impact on the frequency of modified audit opinions. Our research has implications for China's regulators who are striving to improve accounting information, transparency, and corporate governance.

DOI

10.1016/j.jaccpubpol.2007.05.004

Print ISSN

02784254

E-ISSN

18732070

Publisher Statement

Copyright © 2007 Elsevier Inc

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Full-text Version

Publisher’s Version

Recommended Citation

Firth, M., Fung, P. M. Y., & Rui, O. M. (2007). Ownership, two-tier board structure, and the informativeness of earnings: Evidence from China. Journal of Accounting & Public Policy, 26(4), 463-496. doi: 10.1016/j.jaccpubpol.2007.05.004