An Empirical Research On Earnings Management Of Our Listed Companies

Earnings management is a topic of nearly twenty years in western countries, on the other side, its study in china evolves recently. However, with the economic reform, development of capital market and the change of related accounting laws. The spread of earnings management has caused accounting information inconsistent with the facts. It has always been a focus of investors, bondholders, security supervision department etc. In fact, it is not only a simple accounting problem but an involved social one. Accordingly, to study the earnings management problem of listed company in our country is fully necessary and urgent now.Firstly, this paper gives an explicit definition about what is earnings management, explains the characters, motivations, types and chief ways of earnings management. Then, on the basis of the native and foreign literature, this paper chooses the financial index: ROE and ROE subtracted seldom profit and loss to empirical research. And it analyzes the sample distribution through quantificational and statistical way and hypothesis tests. From the empirical research, we can draw following two conclusions: the first, the phenomenon of earnings management exists really in our listed companies; the second, that can be controlled effectively as long as something was done abort it. Subsequently, this paper analyzes the institution of earnings management from the inside and outside of listed companies in detail based on the first conclusion; and in order to reduce the action of earnings management, it gives some advices based on the second conclusion and that analysis. And there are some practical reference merits to normalize the behaviors of our listed companies, and there are some realism meanings to promote the healthy development of the securities market in China.The innovations of this paper include: the first, the research first time connects ROE with ROE subtracted seldom profit and loss; the second, it first time through the empirical reveals that we can control the phenomenon of earnings management effectively.