A Study On Earnings Management Of Loss Listed Companies

As a difficult problem in the international capital market, earnings management is also used by a lot of listed companies in china to avoid some special regulation. Because china securities regulatory commission has some rules for the lost list company, for example, special treatment, pausing and stopping on the market, in order to avoid these punishments, a lot of lost listed companies adopt the earnings management to achieve the goal of making a profit instead of suffering a loss. The subject of this paper is the listed company stopped loss in 2005.First, the paper gives the definition of earnings management; discusses the theoretical basis: the contrast theory and the information economics theory. In chapter 2, the paper gives a description of the loss and then combining the system of china it proves the special motive and methods of earnings management in-depth of china loss listed company. In chapter 3, based on the hypothesis, we collect the sampling, choose the Jones CF model and amend it. All the sampling data are colleted from www.csrc.gov.cn, and the major statistical tools are Eviews and Excel. In chapter 4, we find the conclusion from the demonstration: there is obvious earnings management in the year loss listed company when they stop loss. We can also find the preference order of these companies is: net amount of non-operating revenue and expense, investment earnings and subsidiary. Finally, on the foundation studied in preceding paragraphs and the behaviors of earnings management of the loss listed company in China at present, we point out some essential and beneficial policy recommendations.The mainly innovation of this paper is: first, it corrected the Jones CF model based on the preceding theoretical analysis; second, the point of view of this paper is different from other articles concerning about earnings management; last but not least, we put forward some constructive suggestions at end of it.