A Study On The Decision-making Mechannism Of Transfer Pricing In Listed Company

With the constant development of China's capital market and the constant expansion of listed companies, related party transactions occurrence in listed companies frequently. Becauce of the uncertainty of related party transactions, as well as the non-equity, hidden, and the difficulty of regulation of it's transfer pricing, investors and the country's interest to suffer. The flexibility transfer pricing between related parties, become a core issue of related party transactions. By analyzing the transfer pricing policy, information users can judge the fairness of related party transactions, as well as the company's financial condition and operating results, so that correctly evaluate the investment value of the company's. Have a reasonable and effective decision-making mechanism in the related parties'transfer pricing is of great significance.This article,first, on the basis of the relevant literature review, related party transactions and it's transfer pricing, transfer pricing decision-making mechanism was discussed.After that,transfer pricing of related party transactions carried out theoretical analysis of the decision-making. Including: transfer pricing in the decision-making factors, pricing options, transfer pricing decision-making procedures and decision-making risk control, as well as disclosured information of the transfer pricing of related-party transactions.Then, based on the analysis of the descriptive statistics about decision-making mechanism of related parties'transfer pricing, analyzed earnings management behavior and tax avoidance exist in decision-making of related parties'transfer pricing. This paper selects the listed companies in Zhejiang province during 2006-2008 which disclose related-party transactions, a total of 340 samples. By describing the statistical distribution of sample companies'characteristic variables, further use of non-parametric test, analyzed the features of earnings management behavior and tax avoidance exist in decision-making of related parties'transfer pricing. The study found: Even when they are issued an unqualified audit opinion of the listed companies are also evident in the use of transfer pricing related-party transactions carried out earnings management behavior; Listed companies have to use transfer pricing to improve profitability to end deficits in behavior; Listed companies have to use transfer pricing to achieve additional placement of shares eligible for behavior; ST Company's related-party transactions obvious differences in the degree of transfer pricing,and did not pass the empirical test. However, a preliminary verification of the descriptive statistics associated with ST's high level of transfer pricing transactions; A high concentration of company stock, a higher degree of transfer pricing related-party transactions, the controlling shareholder may have the use of transfer pricing in the behavior of the transfer of profits; Listed companies have the motive to use transfer pricing to evade income taxes. Concludes with recommendations of the decision-making mechanism in the related parties'transfer pricing.The innovation of this paper is to study the contents of transfer pricing in decision-making mechanism, Analyzed the transfer pricing decision-making systematicly, and analyzed the status quo and problems that exist in the transfer pricing in decision-making mechanisms through empirical research.