機構投資人本身擁有專業知與資源，理論上在公司治理中扮演著相當重要的角色，Maug(1998)認為機構投資人持股比例較高時會有較大的動機報收集資訊，並監控經理人的行為，高蘭芬(2001)亦發現機構投資人是有效降低公司代理問題的因素之一。而Fudenberg & Tirole(1995)的研究則指出，經理人在不同經營環境下，會利用裁決性應計項目來從事盈餘管理的行為。故本研探討股權結構中機構投資人持股比例較高時，是否對管理當局使用裁決性應計項目有所影響。實證結果發現臺灣股市中經理人確實存在有盈餘平穩化的行為；而當機構投資人持股比例較高時，亦顯著的限制了這項行為。此外，在不同情境對的敏感度分析發現，在公司股票報酬超越大盤報酬、當年度EPS是正的、Tobin’s Q值大於一時或代理問題較嚴重時，公司在當期表現佳，在下一期預期表現不佳時，經理人的盈餘操縱行為及機構投資人的監控效果均十分明顯。

Because of their professional knowledge and resources, the institutional investors play an important role on the corporate governance. Maug (1998) found when the institutional investors with relative high shareholding rate have higher incentive to collect and monitor the behaviors of manager. Kao (2001) also found institutional investor is one of the factors which could reduce the agency problem of company. The study of Fudenberg and Tirole (1995) show the managers have incentives to smooth earnings in different management environment. In this study, we discuss the effect of institutional investors with relative high shareholding rate on the earnings management by manipulate the accruals. The empirical results show there exist significant earnings smoothing behaviors in Taiwan stock market and the institutional investors play a monitoring role significantly. The sensitive analysis show when the expected performance was bad, those firms with positive abnormal returns, positive EPS, Tobin’s Q greater than one and serious agency problems both the earnings management and monitor effect of institutional investors are significantly.