The Effect Of Supervisory Laws And Regulations On Eamings Management Of Listed Co.

Combined with the general theory of earnings management,this paper analyzed the internal and outside factors resulting in earnings management. On this basis,this paper discussed the effect of supervisory laws and regulations of securities market on the earnings management of the listed company. To discuss the topic deeply,we put emphasis on discussing the effect of re-financing and quitting supervisory laws and regulations on the earnings management of the listed company.When discussing the effect of re-financing supervisory laws and regulations,we selected ROE as sample,which is the core standard in the re-financing supervisory laws and regulations. The statistics of ROE from 1998 to 2001 suggest that the earnings management on ROE change with the changes of re-financing supervisory laws and regulations.When discussing the effect of quitting supervisory laws and regulations,we selected the companies that made loss fist time and companies that were facing the quitting risk as samples individually. We discovered that the companies that made loss fist time used the method "taking a big bath" to enlarge their loss. And we also discovered that the listed companies that were facing the quitting risk did their best to make profit to prevent from quitting the market.At the same time,through case studies,we also discussed the major methods of the earnings management used by the listed company. According to the above research results,this paper further give out some suggestion to prevent the serious market risk arising from the earnings management.