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Monitoring or Collusion? The Effect of Common Institutional Ownership on Revenue Manipulation

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  • Yujie Yang
  • Han Zhang
  • Minghui Li

Abstract

This study investigates the effect of common institutional ownership (CIO) on revenue manipulation. Using a sample of Chinese listed firms, we find that CIO is negatively associated with revenue manipulation. The mechanism analyses reveal that CIO generates an information advantage and internalises governance externalities. Further analyses show that the monitoring effect of CIO is stronger for long‐term and independent CIO, firms with revenue recognition–related critical audit matters, firms suspected of meeting the revenue‐related delisting rules, non‐state‐owned enterprises and firms operating in regions with a weak legal environment. Overall, our findings enrich the understanding of the monitoring effect of CIO in emerging markets.

Suggested Citation

  • Yujie Yang & Han Zhang & Minghui Li, 2025. "Monitoring or Collusion? The Effect of Common Institutional Ownership on Revenue Manipulation," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(4), pages 3450-3471, December.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:4:p:3450-3471
    DOI: 10.1111/acfi.70049
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