Empirical Research Of The Behaviors And Methods Of Earning Management On Unprofitable Listed Company

The qualification of listed company is always be an extremely scarce resource in China, thus it is very important for our enterprise to protect this resource. Especially to those listed company which suffering losses, they will face the special treatment or stop trading or even wash-out if it couldn't gain profit timely. Therefore listed companies will try to gain profit through earnings management if they couldn't make profit through operating activities. But the extensive existence of earnings management severely aggravated the quality of financial information. The modified earning information is not able to fairly reveal the financial situation and operating performance, and causes itself less valuable in decision making, meanwhile the modified earnings information damages the benefit of information user so that it is unavailing to the optimal allocation of social resource. Concerning the above issues, the earning management is very important.Through ways of standardized and empirical research, the subject of this paper researches and analyzes the loss of listed companies'behaviors and selection of methods of earnings management on the basis of predecessors'researches. Firstly, it discusses related theories of earnings management, and defines earnings management through standardized research, differentiates and analyzes similar concepts, on the basis of that summarize the features of earnings management, and analyzes it dialectically, which makes the subject of this paper based on a clear understanding about the earnings management . Secondly, in the background of the special systems of China , analyzing constraints and motives of the loss of listed companies'behaviors of earnings management, and what factors influence the choice of main means about the loss of listed companies'behaviors of earnings management, which provide the reference to the following hypothesis about empirical research. Thirdly, the subject of this paper use the empirical study to prove that the loss of listed companies in China use the earning management actually, and biased for the choice on earnings management means in the year that making up the loss. Finally, facing up the fact that earnings management behavior of the loss of listed companies is very difficult to eradicate, the author introduces some ways to identify behaviors and means of earnings management ,hoping to minimize harm to the smallest. This has very important meanings to defend investor's lawful right,improve stock market investment environment and promote the orderly operation of securities markets.