Study On Earnings Management Of Agricultural Listed Companies In China

Earnings management has been a widespread domestic and foreign companies act, excessive earnings management not only mislead earnings information users, but also damage the interests of outside investors and other related people of the company, or even disrupt the market order, affect the healthy development of capital market. Therefore, the issue of earnings management for the modern accounting research is an important area. Study abroad has been more than 20 years, with the rapid development of China's capital market and accounting academic's efforts, China's research on earnings management achieved some results in recent years. And the research provides a theoretical basis and data experience for the regulation on the listed companies and formulation of accounting standards. The evidences indicate that earnings management with Chinese characteristics exists in Chinese listed companies generally, and special industry's earnings management has special characteristics. Agriculture industry has long investment cycle and low profit margins, so the overall performance of agricultural listed companies is poor. Therefore, compared to other sectors, agricultural listed companies have stronger earnings management motivation, and the extent of earnings management may also be relatively large. Dominance of state-owned shares in Agriculture listed companies increased the possibility of earnings management to some extent. Agricultural policy bias is larger in China in recent years, the industry in tax relief, various forms of government subsidy and so on are all enjoying the preferential policies of the central and local governments, so agriculture listed companies' choice in earnings management means must be distinguished from other industry companies'. The research on earnings management of Agricultural listed companies, firstly can regulate earnings management of agricultural listed companies better under the guidance of the national policy, more importantly, can provide scientific and possible prevention of internal and external measures through the discovery of problems and its reasons,then can prevent excessive earnings management, maintain the normal order of China's capital market, promote agricultural companies'healthy development, make agricultural listed companies play their active role.Agricultural listed companies are this paper's study object. The paper takes both theoretical and empirical research on their earnings management behavior under the government policy for agricultural industry and their characteristics. The paper consists of seven parts. The first chapter points the purpose and significance of the study, proposes the methods and the framework of the research based on making a review of current studies on the topic. Chapter II discriminates earnings management and related concepts, summarizes four characteristics of earnings management, analyzes premise of earnings management-Efficient Market Hypothesis, puts forward two exist conditions of earnings management-Asymmetric information and accounting standards'not fully effective. Chapter III defines agricultural listed companies, listed companies on the characteristics of China's agriculture, the Government has listed the company's policy on agriculture and over-earnings management of agricultural listed companies on the basis of the analysis, takes normality test of sample companies'return on equity and earnings per share in 2008 using SPSS listed companies on were normal test to verifies the existence of agricultural listed companies'earnings management. Derives three main earnings management motives of agricultural listed companies:capital market motivations, managers reward motivation and for government subsidies motivation. Analizes the earnings management's impact on the company itself and the capital market. Chapter IV takes an empirical study the extent of agricultural listed companies'earnings management in 2008. Proposes extended modified Jones model based on the modified Jones mode under the agricultural industry's characteristics. Estimates of the extent of agricultural listed companies' earnings management use OLS. The result shows that only a handful of companies did not manage earnings. Majority of companies have varying degrees of positive or negative earnings management. And several companies manage earnings excessively. Chapter V sets up multiple regression model according to the main factors affecting Net profit, the result shows that net operating income and main business profit is the most important items affecting net profit. We infer that agricultural listed companies prefer to use four earnings management means:restructuring, related party transactions, access to government subsidies, accounting choice and accounting estimates. On the basis of the previous five chapters, Chapter VI puts foreword treatment recommendations for excessive earnings management of agricultural listed companies from the role of government, internal governance, external audit and moral education. Conclusion Chapter VII summarizes the conclusions and innovations of this paper.