Analysis On Earnings Quality Of Domestic Listed Companies In Steel Industry

The earnings quality of listed companies has been focused both in here and abroad. If the earning information the listed companies offer is not good, even illusive, it will mislead the information users to misunderstand the real situation of the companies and make the wrong decision, which will bring the losing to the information users. How can we analyze the earnings quality of domestic listed companies? In this paper, we will take the domestic listed companies in steel industry as the study object and discuss the way that analyze the earning quality of the listed companies.This paper, expatiating the content of the earnings quality, thought it includes earnings information quality and earnings economy quality and should build a general analytic system of earnings quality by industrial comparable companies after giving a summary of the methods of the earnings quality analysis.Then, based on prevenient study, we built the analytic system of the earnings quality of domestic listed companies in steel industry according to the content of the earnings quality and the specialty of the steel industry, which takes the earnings information quality character and the earnings economy quality character as the principle. It chooses the Factor Analysis to distribute the power which can keep the power impersonal. Then we analyzed the earnings quality of the listed companies in steel industry based on the data from 2003 to 2005 and compare the result with the result of the single index analysis. The result showed that this system can distinguish the earnings quality of the listed companies in steel industry as a whole, and also can find out the main factors affecting the earnings quality of the listed companies in steel industry during the review period.At the end of the paper, we came up with the suggestions in side of the investors and the governing department.