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Earnings management has received considerable attention in the accounting literature, but the prior literature research results there are two opposing views from various angles, the existing literature is not able to clearly show that the relationship between ownership structure and earnings management. The monograph "Equity Concentration and Earnings Management Type Selection" by Doctor Yuan Tangmei has solved the puzzle problem "There are two opposing views in research area of equity governance affect earnings management in all cases." This paper describes the reform train of thought, research contents and research conclusions, main innovation, academic value of the monograph. The monograph research result is inconsistent with any previous common view that equity concentration affect earnings management, but not opposite to the before view, it give a new explanation from another angle for a variety of equity concentration focus on the uncertainty of the impact of earnings management. These results of the monograph study breakthrough some of the research results of this research field, it may shed a new light on the effect of equity concentration on earnings management, and has extended meaning.

We examine the voluntary disclosure practices of family firms. We find that, compared to nonfamily firms, family firms provide fewer earnings forecasts and conference calls, but more earnings warnings. Whereas the former is consistent with family owners having a longer investment horizon, better monitoring of management, and lower information asymmetry between owners and managers, the higher likelihood of earnings warnings is consistent with family owners having greater litigation and reputation cost concerns. We also document that family ownership dominates nonfamily insider ownership and concentrated institutional ownership in explaining the likelihood of voluntary disclosure. Using alternative proxies for the founding family's presence in the firm leads to similar results.

We hypothesize that insiders strategically choose disclosure policies and the timing of their equity trades to maximize trading profits, subject to the litigation costs associated with disclosure and insider trading. Accounting for endogeneity between disclosures and trading, we find that when managers plan to purchase shares, they increase the number of bad news forecasts to reduce the purchase price. In addition, this relation is stronger for trades initiated by chief executive officers than for those initiated by other executives. Confirming this strategic behavior, we find that managers successfully time their trades around bad news forecasts, buying fewer shares beforehand and more afterwards. We do not find that managers adjust their forecasting activity when they are selling shares, consistent with higher litigation concerns associated with insider sales. Overall, our evidence suggests that insiders do exploit voluntary disclosure opportunities for personal gain, but only selectively, when litigation risk is sufficiently low. Copyright University of Chicago on behalf of the Institute of Professional Accounting, 2006.