An Analysis and Evaluation of the Real Earnings Management Constraint Mechanism from the Perspective of Corporate Governance

Abstract: This paper present the results of empirical studies into the construction of an effective constraint mechanism from the perspective of corporate governance. It includes an examination of the effects of various factors on real earnings management, such as ownership structure, the characteristics of the board of directors and supervisors, and executive compensation. The results show that equity balance, board size and executive incentives have a positive impact on the real earnings management behaviour of listed companies. In addition, an analysis is undertaken using the factor analysis method of the proxy variables which have a significant effect on the real earnings management constraint mechanism. A comprehensive constraint efficiency model is subsequently constructed, tested and  evaluated to confirm that the conclusions drawn are effective.