A Study On Earnings Management Of Agricultural Listed Companies

Since stock market presents itself, the listed corporation becomes one of primary channels to allocate social resources. At the same time, the accounting surplus which is exposed by the corporation and reflects the state of firm's profit and finance, in some sense, becomes the base on which stock market invests and disposes resources effectively. Consequently, the problems that the accounting surplus exposed by listed corporation is true or not, or the problems about controlling the surplus, are not only related to the function of stock market to allocate social resources effectively, but also inspects the reasonability and validity of government's supervision. Earnings management is the disclosure management that enterprises managers intervene the course of the external financial report purposefully in order to obtain some private interests. The study on earnings management in our country appeared lately relative to the foreign study, especially about study of demonstration. On account of great differences of economic environment and background inside and outside, domestic scholars research chiefly the listed company, particularly more on which is placed in special periods, relatively less on special industry. For example, the study on politics sensitive industry—agricultural listed company hardly exists. Agricultural listed company represents senior agricultural production power on present stage and becomes the important form of fulfillment of agricultural property administration. Consequently, the government pays close attention to agricultural listed company. Central and local governments set down relational support policies. The writer infers that agricultural listed company has the motive for earnings management so that proposes the study hypothesis: agricultural listed company presents universal phenomenon of earnings management.This paper which is based on the new institutional economics theory of agent, information asymmetry, property right and effective market, consulting of basis theory of earnings management, deeply analyzes the condition and motivation for earnings management of agricultural listed company. And then the paper chooses the accounting surplus of agricultural listed company in Shanghai stock exchange and Shenzhen stock exchange as sample data, uses the method of post-management earnings distribution and demonstrates the existence of earnings management of agricultural listed company. Finally, the paper investigates methods of earnings management through the combination of theory and case.This paper is divided into seven sections: the first section is guiding which brings up the research issue and significance; the second section is the summary of theory on earnings management, we define the concept of earnings management and analysis the features and general condition; the third section is the situation of earnings management of agricultural listed company, we further analysis the motive of earnings management of agricultural listed company theoretically; the fourth section proves the presence of earnings management of agricultural listed company; the fifth section analyses the popular methods of agricultural listed company; the sixth section is the suggestions to solve the problems; the seventh section is the research conclusions and prospects.The research conclusions are as follows:1. By demonstration analysis, EPS and ROE from 2002 and 2005 which are all from 54 agricultural listed companies don't obey the normal distribution, thereby they are both likely to be interfered factitiously. Thus it validates the research hypothesis: agricultural listed company presents universal phenomenon of earnings management.2. By theory and case analysis, we conclude three methods of earnings management of agricultural listed company: utilization of related transaction, non-frequent profit-loss and change of accounting policy and accounting estimating. The analysis of those methods is based on theory and general condition of which earnings management arises, and synchronously in view of particularity of industry which agricultural listed company possesses.