The Analysis on the Relationship between the Equity Incentive and the Accounting Information Quality

Abstract

This study examines the relationship between the equity incentive and the accounting information quality of the Chinese listed companies. Our sample is measured between 2005 and 2009, obtained from the annual reports of Chinese listed companies. Based on the empirical research, we find that the effect of the equity incentive on the accounting information dose exist and phases. The companies with the equity incentive plan will have higher accounting information quality between 2005 and 2007. But, the equity incentive has a negative effect on the accounting information quality of the manufacturing between 2008 and 2009, and the relationship between the equity incentive and the accounting information quality of industries other than manufacturing during that period is opaque.