Investigation Of How Related Party Transactions Are Used As A Way Of Earning Management In Chinese Listed Firms

When the investors have a basic analysis on a listed firm, the earning management is can't be shied away. In order to meet the qualification of rights issue, listed firms have the incentive to conduct earnings management. At the same time, the related party transactions become a way of listed firms conduct earning managements. This paper investigates the listed firms in china how to conduct earning managements by related party transactions .This paper emphasizes on the problems of listed firms conduct earning managements by related party transactions. As the needs of this paper, the investigation is only pay attention to the listed firms in china.The dissertation introduces earning managements intensive concept. Through choosing accounting policies and accounting methods left by the accounting rules and institutions, the managers of listed firms conduct earning managements. Then having a general introduction of connected construction, the author clarified the definition of related party relationships and related party transaction and analyzed the condition of related party transactions in listed firms. In thesis, the author had a thorough analysis of the causes and means of earning management by ways of related party transactions in our listed firms. As far as the developing trend of earning management by ways of related party transactions in china are concerned, in combination with the regulatory experiences of overseas securities regulatory authorities, this thesis put forward some relevant policies and suggestions including the following aspects: to improve corporate governance, protecting the mid-small shareholders and so on.This paper has six parties. The first part has a summary of earning management, secondly giving a depiction on the related party transaction and the actuality of the related party transaction between Chinese listed firms, the third party analyses the whys of listed firms make earning managements by the related party transactions, fourthly analyses how the related party transactions are used as ways to make earning management by listed firms, the fifth party gives a way how to identify the listed firms whether make earning managements by he related party transactions, sixth put forward some measures of how to improve the listed firms make earning managements by he related party transactions.The innovations and deficiencies in this paper, at the present time, the academe has an emphasis on the problems of the related party transaction. But neglects the particular ways of listed firms conduct earning managements by related party transactions, This paper investigates the particular ways and whys. When research the whys, the author put forward the unbalance criterion and unfair prices of the related party transactions. At the same time has a particular investigation on the ways of listed firms conduct earning managements by the related party transactions, especially has a emphasis on the related party transactions of recombining assets. Bring forward the way of identifying the earning managements of listed firms by the unconventionality interest rate. The deficiencies are lack of theoretic basis and innovations.With the development of our country's capital market, the related party transaction is an important factor which influences the stock price. However, the earning managements of listed firms by related party transactions is an objective action of companies and its impact on social economy has two sides. So we must regulate the earning managements of listed firms by related party transactions to exploit the favorable function and avoid the unfavorable effect.