Ultimate controlling shareholders and the earnings quality — Empirical evidence from the Chinese securities market

This thesis studies the impact of ultimate controlling shareholders on the earnings quality of the listed companies. Taking A-share companies that went public during 2008-2011 as samples and measuring earnings quality with discretional accruals, our study discovers that the ultimate controlling shareholders´ ownership proportion, the deviation of ownership and control rights as well as the shareholding ratio of the biggest investor of circulation shares have significant explanatory effects on earnings quality. Specifically, in public companies, the discretional accruals are in inverted U-shaped correlation with the ownership proportion of the actual controllers, in significant positive correlation with the deviation of the actual controllers´ two rights, and in significant negative correlation with the shareholding ratio of the biggest investor of circulation shares. Based on these conclusions, this thesis provides a number of policy suggestions.