Research On Earning's Quality Appraising System Of Domestic Listed Company

These years many financial frauds of listed companies appear in domestic and overseas security markets. Some companies prettify financial reports and modify accounting earnings to obtain loans or financial credit, launch security markets, dodge taxes or realize other political objectives. All of those make investors become more serious and suspicious while making invest decisions. They pay attention to not only the number of earnings on the paper, but also the earnings' quality. How to reveal the earnings' quality of listed company through the restrictions and validations between accounting information in the splendid reports becomes the wise choice of investors and even the urgent problem related to the development of the whole security market.The paper adopts normative research and empirical study, as well as qualitative study and quantitative study. Firstly, from the basic connotation, the differences and relations between earnings' quality and earnings' quantity, and the influencing factors of earnings' quality, it deduces the core elements of earnings' quality, which are the facticity, continuance, cash-ensurence growth of earnings and profitability. Secondly, it analyses the facticity of earnings by the means of qualitative study, while analyses other core elements through quantitative study. The author sets up a series of separate indexes, and then forms the comprehensive index to evaluate earnings' quality. Finally, the author does empirical study according to the financial data of domestic listed companies, and finally puts forward a series of countermeasures and suggestion on how to improve the earnings' quality of listed companies.The conclusions include: Firstly, earning's quality analysis include the facticity, continuance, cash-ensurence growth of earnings and profitability analysis, which are the five core elements of earning's quality. Secondly, many factors influence earning's quality, such as assets' status, profit's quality, earning's constitution, degree of operation and financial lever and so on. Thirdly, the author sets up the comprehensive index to better evaluate earnings' quality. Through the scores of this index, we can line the listed company's earning's quality and then make some suggestions and references to the investors.