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

Michael Arthur FIRTH, M. Y., Peter FUNG, M., Oliver RUI

Research output: Journal PublicationsJournal Article (refereed)peer-review

312 Citations (Scopus)


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.
Original languageEnglish
Pages (from-to)463-496
Number of pages34
JournalJournal of Accounting and Public Policy
Issue number4
Publication statusPublished - 1 Jul 2007


  • Corporate governance
  • Informativeness of earnings
  • Ownership

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