Research On The Accounting Methods Of Earnings Management Of Listed Companies

In western, it has been more than 20 years on earnings management study. Nowadays, study on earnings management focuses on its environment, motive, and through practical study to prove if earnings management happens or not and when it happens, less pay attention to the definite discretionary accrual items and accounting methods. Otherwise, for the financial reports stockholders, it is important to distinguish what accounting methods in earnings management, then they can make reasonable decisions.The dissertation introduces earnings management intensive concept. Through choosing accounting policies and accounting methods left by the accounting rules and institutions, the managers of listed companies conduct earnings management. Then this paper points out that earnings management has such motives: management motive; political cost motive; and others. Furthermore, discusses that in the special background of our market-oriented economy, earnings management is bound to exist.Based on the analysis of earnings management concept, combined with our accounting rules and institutions, this article researches into assets, liability, equity, revenue, expenditure, etc, to draw out the accounting methods of earnings management in these three concrete aspects (1) by asset impairment, mainly found that accounting rules and institutions can't define certain items clearly; relatively bigger choosing space for some discretionary accrual items; the listed companies disclosure information unclear.(2)earnings management by revenue and expenditure. The companies probably conduct earnings management through the clarification, the realizing time choosing, and accounting methods change.(3) earnings management through related enterprises. It found that the companies conduct earnings management in ways as follows: bug or sell among related companies; run assets for one another; use the capital of related companies to realize revenue; assets and liabilities reorganizing.In short, earnings management is a reason for the loss of objectivity of accounting information. It is crucial to establish the related policy system; construct more efficient auditing system; avoid the government intervene as possible as can be; function more of the media; and increase he analysis ability of financial statement readers.