Research On Management Stimulation And Earnings Management Based On ST Company

The article use the principle of risks and uncertainty analysis from the relationship between management stimulation and earnings management.use theoretical analysis and the demonstration studies with characteristic of ST company to analyse. The author found the reason of earning management for ST company is the existence of riks and uncertainty make it difficult for management to get the salary. The management of ST company use earnings management to meet the demand of salary contract and protect their own interest. The article uses information of of Shanghai stock exchange in 2004 as samples.Construct a model with ST characteristic analysing DA in positive ,negative and absolute value to observe the relationship between management stimulation and earnings management. The reach result proof The relation is remarkable between managers'reward and the degree of earnings management. Which means the higher managers'reward, the more intense of the earnings management motivation of the managers. Management of ST company doesn't hold too much stocks of company , the relationship between stocks hold by management and earnings management is not apparent.The result of research proof the management award is more effective than stock hold by management to stimulate the management. The aim of earnings management is to protect management's own interests, stocks hold by ST company management is not effective to eliminate the intense of earnings management. The article gives follows suggestions :improve the procedure of management award contract, and company management and supervision .Make revision to the procedure for ST to quit the stock market, construct more scientific performance appraisal system for ST company.