The Study Of Small And Medium-Sized Enterprises' Earnings Management Based On Credit Of Bank

Small and medium-sized enterprises(SMEs) play an important role in national economy, they are important driving force in the national economy development. However, because of weak financial strength, big business risks, insufficient pledges, lack of credit records and information transparency, SMEs have difficulty to obtain sufficient credit from the indirect financing. SMEs'earning management (EM) can alleviate the financing difficulty of SMEs to a certain extent, at the same time their earring out of EM in an unethical way have also to intensify the risk of credit of bank. Therefore the article launches the research on the SMEs' EM based on credit of bank. Scientifically analyse the present situation of SMEs' EM, disclose the reasons and mainly factors, try to find some measurements to control SMEs'EM in an ethical way, prevent the risk of credit of bank, realize the double-win of EM, have very important theoretical and practical significance for SMEs to improve their quality of accounting information, speed up their development in a healthy way, enhance their competitive power.This article begins with the review of relevant theories of EM, analyzes the intension and basic theory of SMEs'EM, studies the earnings management behaviors of 200 SMEs which have obtained credit from bank by applying of the model of distribution of earnings after management, investigates the SMEs and banks by questionnaire to analyzes statues, manners, impact, motivations and reasons of SMEs'EM; analyzes SMEs'EM in Game theory; analyzes the influence to faith grade because of EM by typical example, analyzes how to be on guard the risk of credit caused by EM also through typical case; at last puts forwords some suggestions of SMEs' EM based on credit of bank.The research makes the conclusions that SMEs'EM based on credit of bank is defined as one kind of management behavior based upon the motivations of credit from bank or avoiding from disobeying debt terms that SMEs adjust corporation earnings to meet the requirements of loan by some manners without prejudice to correlated laws, rules, systems, accounting guide line and criterions. Study on the EM of 200 SMEs by applying of the model of distribution of earnings after management, It was found that the ROA shall be kept slightly higher than that in the intervals 0 to avoid loss and to acquire the rights of loan. In other words, there exist EM phenomena of tiny profit, and also found that the distributions of ROA frequency from 2007 to 2009 show us the number of SMEs in loss to avoid loss by EM is going up year after year. It is found that strict credit police promotes the motivation of SMEs'EM and it is reflected that SMEs are lack of capital and have heavy tax. EM have to be controlled in reasonable way in order to realize double-win game with high performance from normal game with low performance. SMEs'EM promotes the efficiency of loan, at the same time increases the credit risk of bank. Therefore, this article brings forword some suggestions to SMEs'EM from the sides of government,company and bank. Laws and regulations should be completed and tax for SMEs should be reduced. Internal controls in SMEs should be strengthened, credibility and integrity have to be carried out, account professional ethics should be enhanced. Bank should establish credit culture related with SMEs'loan and further support credit aid to SMEs and train creditor and improve credit inspection and strengthen supervision to SMEs.The main innovations of this paper are presented as follows:Firstly, based on the theories of credit rationing, information asymmetry and debt contract, EM double-win theory is set up in a creative way and EM basic theory is enriched and developed.Secondly, Study on the EM of SMEs by applying of the model of distribution of earnings after management, It was found that the ROA shall be kept slightly higher than that in the intervals 0 to avoid loss and to acquire the rights of loan. And it is further developed research field.Thirdly, based on game theory, the author analyzes the double-win essence for EM and further broaden research method and view.