A Study On The Relationship Between Earning Management And Enterprise Development

As far, the researches on earning management mainly focus on detectingexistence of earning management under special background or particular events.However, the ways of earning management are diversified, and purposes arecomplex. To stop earning management completely is impossible. This thesis aims tofind whether smoothing income is bad or good at enterprise development from thepoint of enterprise further development.Firstly, the thesis provides the definition on smoothing income, and uses netincome increasing model to divide one sample into two different samples. One issmoothing income sample, the other is not. And then, according to sustainablegrowth theory and earning growth theory, the thesis develops development abilitytheory and model. After that, we compare the difference between smoothing incomesample's development ability and non smoothing income sample's. At end, we findthat motivation to smooth income is ubiquitous and smoothing income is positive toenterprise development. Finally, we propose that we should be impersonalitytowards earning management, guide earning management and try to perfect systemof information disclosure. At the same time, we provide some further researchdirections based on present production in this field.