This paper examines the effect of activity ownership alliance on earnings quality using a sample of Chinese A-share listed firms during the period 2008-2012. First, we proposed a new concept- activity ownership alliance-to measure controlling rights allocation. The index of Activity ownership alliance combined owner shares and shareholder’s relationship among one firm. Second, we used Jones model to measure accrued earnings quality that is a sign of supervise ability of Board of Directors (BOD). The findings suggest that activity ownership alliance is a positive factor to improve the supervision effect of BOD. The result of the analysis indicates that (1) it is easier to achieve balance among different shareholders when the largest shareholder dominant the activity ownership alliance; (2) the more the number of shareholders in the activity ownership alliance, and the less the shares percent, the better of supervision effects of BOD, so the better of earnings quality; (3) activity ownership alliance contribute to the better social capital allocation of the firm.