Empirical Analysis On Earnings Management Of Chinese Listed Companies And Measures

Based on the previous researches, the thesis made an analysis and empirical research on the method of earnings management conducted by listed companies.The thesis first summarized the internal and external research achievements on earnings management. The external researches focused on the motive of earnings management, such as maximizing managers' remuneration, avoiding violating liability covenants, and decreasing political costs. The internal researches focused on the existence of earnings management, the behavior of rationing shares, and the behavior of keeping the honor "Listed Company". Through the analysis of previous researches, the content of the thesis were determined. That is, the thesis would analyze common method of earnings management conducted by listed companies by the way of combining regular analysis with empirical research.In the regular analysis, the thesis detailed transaction method and accounting method. Transaction method involves making the transactions well planned or controlling the dealing time, such as reorganizing liabilities, reorganizing assets, and dealing with related parties. Accounting method involves choosing or changing accounting policies and accounting estimate, such as choosing or changing the depreciation method of fixed assets, choosing or changing inventory valuation method.In accordance with the regular analysis, the thesis made an empirical research on earnings management conducted by listed companies from the perspective of nonrecurring gains and losses and impairment allowance of assets. First, through the comparison of the NGL for loss-reverse year with that for the year before and after, the thesis found that listed companies may seek to increase their accounting income to avoid suffering loss in three consecutive years by adjusting NGL. Second, through the horizontal analysis, the thesis further testified that the extent of earnings management with adjusting NGL had declined because of the improvement on the information disclosure regulations. In addition, the thesis proved that Chinese listed companies managed earnings by adjusting the impairment allowance of assets as well through the comparison of the impairment allowance of assets between two consecutive years. Listed companies would increase the impairment allowance when they are unable to avoid loss, and decrease the impairment allowance when they are able to reserve the loss.