An Empirical Research On The Earnings Management Of China A-Share Loss Listed Company

China's securities market has developed in the past 20 years. However, since the economic system of our country is unique and the examination of the issuance follows a quota and qualification system chronically, the qualification of listed company becomes an extremely scarce resource in the existing serious shortage situation, thus it is very important to protect this resource. Especially the loss of a listed company is concerned; the company will be facing the special treatment or stop of trading or even wash-out if it couldn't gain profit timely.Thus listed companies will try to avoid deficit or gain profit through earnings management if they couldn't reach it through operating activities. Earnings management has become a widespread phenomenon in our securities market, for this reason it is necessary to study in depth its situation in China. The research will have far-reaching significance to investors or regulators.Since the beginning of 2001, China has promulgated a series of regulations .These regulations bring more pressure to the deficit companies to avoid loss. This results stronger earnings management, on the other hand, the supervisors try to regulate the earnings management comprehensively and depress it to the lowest level. From the prevalence and instrument of earnings management, this paper analyzes the earnings management in the A-share deficit companies listed in china. Firstly the paper reviews the foreign researches of earnings management and raises the goal of research. After that the paper introduces the concepts, characteristics and influences of earnings management. In the following the motivation and manifestation of earnings management in deficit companies are studied. And then the empirical analysis tests the earnings management existing in the deficit companies through frequency distribution approach after management and multinomial logistic regression model. The result shows:(1) earnings management to avoid deficit are prevalent in the listed companies of our country;(2)there are stronger motivation to gain profit in the companies which gain loss in the last two years;(3)Insiders trading, assets reorganization and preservation for assets' devaluation are the main methods of earnings management; the companies which couldn't gain earnings after the deficit year tend to get larger loss by downward managements through the preservation for assets' devaluation and discretionary accruals, thus they can gain profit in the next year.(4)the capacity of avoidance to deficit through subsidies gradually decreases in the following years. At the end the paper gives advices on how to regulate the earnings management in the listed companies.The innovation of this paper is:(l) the research has an innovative method, this paper has used different methods to examination the hypothesis, these methods have a complementation to each other ;(2) the paper gets innovation in the contents, the sample selected in this paper covers various industries of listed companies, furthermore the time span is very big, these enable the conclusion have a strong persuasive power, thus the research has a certain theoretic and practical significance.