Dynamic Measurement Of Earnings Quality Of Listed Companies Of Steel Industry

The earning information is an important part of the accounting information for a listed company. It has become the focus of attention. Not only the investor pays attention to it, creditors, governments and authorities are also concerned about it. With the financial fraud was exposed, people began to shift focus from earnings quantity to earnings quality. The quality of the earning is very meaningful for stakeholders in making good decisions, to avoid deceptive financial information and for regulating the Chinese security market. The steel industry's management strategy causes its income quality to be characteristic.This paper summarized earnings quality's characteristics form two aspect: information dimension and economical dimension. It can be reflected by income reliability, relativity, profitability, growth and quantitative. Steel industry has its own characteristics, on the analysis of the income and influencing factors of steel industry. The research dataset consists of the financial information of the Chinese steel industry listed companies from the year of 2005 to 2009. It takes the five attributes of earnings quality as exogenous latent variables and selects 19 indexes as exogenous dominant variables. The PLS model is used to establish earnings quality measurement equation which we can use to grade earnings quality. The author compared scores with enterprise value to prove the validity of model.At the end, the paper established dynamic measurement model, which used latent growth model and the scores of earnings quality of 63 steel industry listed companies in 2005-2009. Model estimation results show that the sample company's initial earnings quality is distinctly different but the difference of variation tendency is not significant. After analyzing the earnings quality's variation tendency forecast range of earnings quality's scores in 2010.