Research On Accounting Estimates And Earnings Management

In order to reflect the interests of the company to achieve the relevant objectives, listed companies have been put forward to try to manipulate profit and sugar up the financial statement to earnings management. In recent years, through affiliated transactions, debt restructuring is limited, a way to manipulate profit is being more and more abused by listed companies, that is, the accounting estimate. Because Accounting estimate results are enterprises'judgments on transactions based on the recent information available,so the measuring and modifying of accounting estimation have a lot of subjectivities; Also because of circumstances outside personnel with the asymmetric information about the company situations, can not be a good evaluation of the supervision of listed companies to make the reasonableness of accounting estimates, therefore, the accounting estimates have gradually become profit manipulation tool by listed companies in China. In order to solve the following question: whether or not China's listed companies with significant changes in accounting estimates for the use of earnings management suspects; listed companies on the types of changes in accounting estimates and the use of how to manipulate the extent of the impact; whether China listed companies has obvious manipulation suspicion using accounting estimate; how do China listed companies using accounting estimate; whether China's listed companies using two or more accounting estimate at the same time. How about the effects of the launch of new accounting standards. This article using standardizing research and empirical studies analyze China's listed companies'manipulation characteristic of accounting estimate.This paper is based on the studies upon the A-share companies that have changed their accounting estimates in the annual reports issued during 2005–2007.With considering of the under-reforming economical background of China and its unique capital market system, the main issue is studied of the companies that have changed their accounting estimates: Earnings management.The studies suggests: Change in accounting estimates items are highly concentrated on providing of bad debt provisions over account receivables. Companies who changed their accounting estimates were depending on the non-recurring gains to support their profit of the current year and next year, which are less in consistency. The effect of the new accounting estimate standards is not much obvious on reducing the manipulation of profit. Upon the discoveries introduced by the empirical studies, the article provided initial suggestions on how to restrain abusing of accounting estimates in the listed companies to manipulate the profits.