The Research On Non-efficient Earnings Management And The Governance

In the western accounting theory field, the research on earnings management has yielded something. Along with the capital market development, our research on earnings management also has great innovation. The information content of accounting earnings disclosure of our country's listed companies strengthens day after day, and the covenants based on accounting earnings are more and more, accounting earnings is directly with investors, and investors make fury rent-seeking and game. Because the information is not symmetrical, the enterprise's managers will seeks own maximal benefit through earnings management which is called non-efficient earnings management, relying on own information superiority.According to the influence of earnings management to the market resources disposition, this article divides earnings management into efficient earnings management and non-efficient earnings management. The efficient earnings management will promote effective allocation of resources, so relevant departments should vigorously promote efficient earnings management. The non-efficient earnings management does not affect the allocation of resources or has negative externalities, which would not promote effective allocation of resources. After analyzing the nature and consequences, this article points out that the non-efficient earnings management is a kind of rent-seeking behavior with four levels of consequences, that are accounting consequences(distorting accounting information), economic consequences (misleading stakeholders in decision-making), the capital market consequences (distorting allocation of market resources) and moral conâ‘ sequences (developing into accounting fraud), and leads to inefficient or even ineffective allocation of social resources and great waste of social wealth.Then, this article analyzes the production mechanisms of non-efficient earnings management based on basic premise, objective conditions and generated motivation. And then reviewed the history of governance the earnings management in China, and affirm the achievements, but also points out there are still problems in current. At last, this article puts forward governance measures in the short and long-term aspects. About the short-term government measure, we should make system improvement and innovation, mainly includes perfecting internal control system, perfecting company governance structure, consummating accounting standards, preparing comprehensive income reports, using the fair t value measurement attribute, using EVA and the balanced scored card and implementing capital cost accounting, perfecting contract to clear property rights, perfecting accounting laws, and perfecting punishment mechanism.About the long-term government measure, we should consummate the incentive mechanism, and build the positive enterprise culture, cultivate enterprise superintendent's ideology capital.