Study On Earnings Management Of Listed Companies Based On Related Party Transaction

Many earnings management behavior exists in our stock market, and the related-party transactions are common methods which the listed companies use to conduct the earnings management. The earnings management behavior that the listed companies conduct not only hinders the healthy development of capital market, but also let accounting scholars pay more and more attention to the research of earnings management theory. Earnings management has two sides. On the one hand, earnings management in the reasonable range can promote the realization of the company goal, motivate managers, and reduce the cost of contract. On the other hand, excessive earnings management may disturb the order of the capital market, reduce the reliability of accounting information which mislead the whole society investors, and eventually influence the allocation of the whole society's resources. The positive role of earnings management exists only in theory, basically exists in reality. But the negative effects of earnings management are very common. The normalized earnings management behavior can not only make the healthy development of the capital market, but also can protect the stakeholders'interest, maximize the effective allocation of social resources. So the research of the negative effects of earnings management has great theoretical and practical value. In real society, there are various means of earnings management that the listed companies use, such as the use of the alternative of accounting policies, the use of related party transactions, the use of business reengineering, making up transactions, using the local government aid, and so on. Because of the concealment and the unfairness of related party transactions, the related party transactions become the main means that the listed companies use to conduct earnings management behavior with the addition of the non-standard provision of the related party transactions that the accounting principle sets. So how to establish a perfect set of supervisory system to regulate the related party transactions is very important, which can make the related party transactions that the listed company conducts more transparent and fair, and then promote the healthy development of capital market. Establishing a perfect set of supervisory system to regulate the related party transactions is also important to keep the listed company from using the related party transactions to conduct earnings management behavior.This thesis will study the excessive earnings management behavior and analyze the listed company using the related party transactions to conduct earnings management behavior with a combination of normative research method and positive analysis method. Firstly, this paper analyzes the reasons that earnings management through the related party transaction exists theoretically. Secondly, this paper chooses A-share listed companies in 2008 as the research sample, making empirical analysis from the standpoint of incentive that the listed companies use to making earnings management using related transactions. Finally, this paper puts forward the relevant policies and suggestions based on the research results which can keep the listed companies away from making earnings management using the related party transactions.This thesis contains five parts, and the main contents are the following:The first part is "introduction". It is mainly to introduce the background of the thesis, the field it will research on, the significance of the essay, the thoughts and the methods of research as well as the domestic and international research condition which the listed companies make earnings management using the related transactions.The second part is "the description of the related party transaction and earnings management". Firstly, this paper introduces the concept of the related party and related party transaction, and then analyzes the basis theory of the related party transaction. Secondly, this paper defines the meaning of earnings management and analyzes the basis theory of the earnings management. At last, this essay introduces the definition of the earnings management using the related transaction.The third part is "the reasons and means that the listed companies make earnings management using the related transaction". Analyze the reasons from the internal and external aspects.The fourth part is "the empirical research that the listed companies make earnings management using the related transactions".The fifth part is "the preventive measures that can prevent the listed company from making earnings management by means of the related party transactions". According to the research conclusion, this part puts forward preventive measures that can prevent the listed company from making earnings management by means of the related transactions from the internal and external aspects.