A Study On Earnings Management And Top Managers Change Of Chinese Listed Companies

China has developed its own stock market for more than ten years. During this period, cases of listed companies' top managers' turnover appeared which has become one of new subjects of practice and accounting theory in our country. Earning management causing by the turnover of top managers becomes an important issue. This paper researched on this issue in horizontal and vertical perspective, studied on whether this turnover could improve the performance of its company, and also gave some important suggestions on how to perfect the control mechanism of listed companies in our country.This paper basing on the basic concept and theory of earnings management introduced the motivation and measurement of it, and then analyzed the listed companies' earnings management behavior during the period of changing top managers. This paper did empirical research on listed companies that changed top managers from 2002 to 2004. I found: (1)In the changing year, compared with the listed companies that haven't changed top managers, the listed companies with non-routine change did not reduce the earnings, but the companies with routine change increased the earning; (2)For the listed companies with non-routine change,compared with the year before changing, in the year after changing these companies reduced the earnings; but for the listed companies with routine change, in the year after changing these companies increased the earnings; (3)Either the listed companies with non-routine or routine change, new top managers did not seem to bring any substantial improvement on their operating performance in short run, they just caused substantial eamings management.