| With China's state-owned enterprises accomplishing share-trading reform and capital markets constantly perfect, more and more executives of a listed company have been to become shareholders. The problem of manipulating profits by executives owning the listed company's shareholdings has been being paid more and more attention. According to some of existing research, executives would manipulate profits in order to maximized their own interests while they hold companies' shareholdings. Whether does the executives'earnings manipulation in Chinese listed companies exist? How was the method of surplus manipulation? This paper respectively carries on the corresponding research.Firstly, this paper reviews previous studies, there are motivations of the executives' earnings manipulation, econometric model of the executives' earnings manipulation, the method of the executives' earnings manipulation and the relation between executives holdings and earnings manipulation. Secondly, this paper makes an empirical research on the existence of the executives' earnings manipulation. Two samples are selected according to the A -share market where executives hold companies' shareholdings from 2007 to 2009. Playability accruals is calculated according to corrected cross-sectional Jones model and measures the degree of every listed company's earnings manipulation. Two groups of research samples are different by the between-group differences analysis. Based on this result, we make an inspection on the relationship between executives' shareholdings and the earnings manipulation of the listed company by using the linear regression method. As a result, there is a significant relation between executives' shareholdings and the earnings manipulation of the listed company. From the further explanation, the behavior of the earnings manipulation by executives owning shareholdings in listed companies indeed exists.On the basis of the empirical research, shareholdings executives owning is divided into two types in order to explain the behavior of earnings manipulation better. One is actual shares and the other is stock options. This paper analyzes the behavior of earnings manipulation in qualitative ways from three aspects which operating income, inventory and asset impairment. At the same time, through the material research and investigation cases, the earnings manipulation behavior is respectively analyzed from the two aspects of actual shares and stock options.The innovation of this paper lies in that executives shares are divided into actual shares and stock options and linear regression empirical is used to proof the existion of executives' manipulation. Based on the premise, the paper specificly analysises the way of earnings manipulation with examples from three aspects of operating income, inventory and assets impairment. |
