Personal Data Protection Systems and Earnings Management

Given the close linkage between earnings management and the accounting institutional environment, we select a sample of Chinese A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2009 to 2023. This timeframe follows China’s implementation of new accounting standards designed to converge with International Financial Reporting Standards in 2006. By around 2008, these standards had been widely adopted by listed firms, providing an institutional foundation for the comparability of financial information.
We apply the following exclusions: (1) financial industry firms; (2) firms with special treatment or other abnormal statuses; and (3) observations with missing data. To address outliers, we winsorize continuous variables at the 1st and 99th percentiles. The resulting sample comprises 13,108 firm-year observations. All financial data are obtained from the China Stock Market & Accounting Research database.