An Empirical Research Of The Earnings Management On Listed Companies Under Special Treatment

At present, earnings management is a hot topic, which is attracted more and more. One important aspect of the research of earnings management is the cause of the earnings management; our country's scholars have also conducted quite many researches in this field, and also have yielded quite many results. However, the empirical research of listed companies under special treatment, the special group in our country's capital maket, is very few. Recently listed companies under special treatment increase fast and are paid attention more and more. The reasons of listed companies under special treatment are various, for example, the net income suffering losses for two years, net assest per share less than the value of the stock and other financial unusual situations. In order to protect the profit of the investor and creditor, strengthen the research of the earnings management of listed companies under special treatment to raise the quality accounting information and improve the stock market's function of the optimization disposition have the very important meaning. So this article stands on the achievements of the earning management made by domestic and foreign scholars, has studied the empirical research of the earnings management on listed companies under special treatment suffering losses for two years.There are five chapters in this thesis. The first chapter is introduction and introduces the research on earnings mamangement in and out of our country, and the research route. The second chapter is the system of under special treatment and its cause of the earnings management. The third and fourth chapters are important in this thesis. The third chapter is the sample's selection and research hypothesis. The data of 197 listed companies under special treatment except the fragmentary data in Shanghai and Shenzhen Stock Exchange from 1999 to 2005 are selected, 122 listed companies under special treatment suffering losses for two years of the 197 listed companies under special treatment are selected for the research of the earnings management. The control group is selected based on the close total assests, the same trade in the year before the first losses of listed companies under special treatment. The fourth chapter is selecting the model and related empirical analysis and conclusion are respectively in Chapter Four and Chapter Five. This article studies the method and degree of listed companies under special treatment and control group with comparative analysis and trend analysis. The writer makes use of the SPSS software to carry on the empirical research drawn the following conclusion: listed companies under special treatment suffering losses for two years conduct the remarkable earnings management with item below the line to achieve turnaround, conduct the remarkable earnings management of deliberately reducing surplus during the first loss year and continue to reduce surplus during the second loss year deliberately. Listed companies under special treatment conduct the remarkable earnings management intentionally by gain on investment, subsidy income and non-operating earnings during the first payoff year. If listed companies under special treatment achieve turnaround in the year next to under first special treatment's year, they will intentionally increasing profits and conduct the remarkable earnings management by non-operating earnings. It shows that the degree of earnings management of listed companies under special treatment presents gradually ascending trend and reach sharp peak in the year first of under special treatment, then descends in the next year. However the degree of earnings management of control group has no obvious fluctuation during these years and all less than the one of listed companies under special treatment.