Abstract: The influence of Party organizations on management behavior and corporate operations is an important object of research in corporate governance. Based on the data of mixed-ownership enterprises, this paper conducts an empirical study of the governance effectiveness and impact mechanism of the Party organizations on the earnings management by classification shifting. The results show that the Party organizations can significantly inhibit the earnings management by classification shifting through the existing leadership system, and this inhibitory effect will vary with the way the Party organizations are embedded in the enterprises, the nature of the enterprises' equity and the differences in time window. The research findings can not only verify the important role that the Party organizations play in influencing the behavior of enterprises, but also provide effective feedback for clarifying the path for the Party organizations to function in the enterprises and the comparison of the Party's governance effectiveness in state-owned enterprises and non-state-owned enterprises. In addition, the findings can enrich the relevant research on the factors affecting the earnings management by classification shifting and provide a valuable reference for the enterprises to improve their internal systems and eliminate institutional incentives.