Research On The Evaluation System Of Earning's Quality Of Listed Company In China

Since the reform and opening up, especially after joining the WTO, China's stock market has received a great development. The number of listed companies in china is growing rapidly, and more and more investors turn to invest in the stock market. However, the frequent exposure of accounting fraud of some listed companies, especially some of big companies made lots of shareholders suffer economic losses, and investors'confidence in investment had been reduced greatly. Also, the behavior of investors becomes hesitant, and they start doubt the truth of listed companies' earnings.Based on the qualitative characteristics of accounting information, this paper qualitatively analyze the influence factors of earning's quality, and finds out five characteristics of earning's quality, which are authenticity, sustainability, growth, cash ensurence and profitability. Then this paper selects corresponding financial indicators based on these five characteristics, and selects the financial data of 51 A-share listed companies of wholesale and retail trade industry as samples, then establishes a comprehensive evaluation system of quality earnings with principal component analysis. According to the scores of 51 listed companies, this paper quantitatively analyze of the earning's quality of the wholesale trade industry, and reach the following conclusions:First, the overall earning's quality of wholesale and retail trade industry is still low. Second, most of the companies'earning's quality is lack of stability. Finally, this paper gives out some proposals about how to improve and stabilize the earning's quality of listed companies.