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An Empirical Research On Earning Management In Chinese Financial Enterprises

Posted on:2011-09-29Degree:MasterType:Thesis
Country:ChinaCandidate:L ChengFull Text:PDF
GTID:2189360305983694Subject:Accounting
Abstract/Summary:PDF Full Text Request
Earning management occurs when managers use judgment in choosing accounting policy and in structuring transactions to alter financial reports to either mislead some stakeholders about the underlying economic performance of the company, or to influence contractual outcomes that depend on reported accounting numbers. Earning management is good for managers in the process of controlling enterprise. Earning management is an important problem highly related to accounting information distortion, investor protection and accounting standard setting. It became a significant research field of accounting, finance and even economics.Finance is the key of modern economics. And financial enterprises are greatly different from nonfinancial enterprises in many parts. Financial enterprises are always deleted in former researches. This thesis researches earning management in Chinese Financial Enterprises with empirical research. It tries to solve these problems:does earning management exist in Chinese Financial Enterprises, the reasons of earning management, the means, and the level so on. This thesis first reviews theories about earning management and the system of Chinese Financial Enterprises, including research review on financial enterprises'earning management. Then, it raises seven conjectures in the view of earning management and checks them by frequency distribution approach and specific accrual models.After empirical researches, the thesis gets these conclusions:there is earning management of avoiding loss in Chinese Financial Enterprises; there is earning management of avoiding decreasing earnings in Chinese Financial Enterprises; compared to non-listed companies, listed companies show more significant earning management of avoiding decreasing earnings, but there is no significant discrepancy in earning management of avoiding loss; it does not show significant earning management of seasoned equity offering and rights offering in Chinese Financial Enterprises; because of no supervision and other reasons, compared with other countries, earning management is more popular in China; new accounting standards restrain banks doing earning management by loan loss provision. The contribution of this thesis is to check whether there is earning management in Chinese Financial Enterprises and whether new accounting standards restrains earning management. It is helpful for accounting standard setters evaluating new accounting standards restrains earning management, the level and the effect of earning management, whether new accounting standards is needed, and whether more disclosure is needed. The end of this thesis points out the disadvantages of this paper and gives some related suggestion about financial supervision and accounting standard setting.
Keywords/Search Tags:Earning Management, Financial Companies, Frequency Distribution Approach, Specific Accrual Models
PDF Full Text Request
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