Marginal Profit Of Listed Companies In China Study On Earnings Management

The history of research on earnings management has been nearly 30 years in the accounting theory circle of the west countries. With the development of the stock market, this problem has begun to appear in our country. Earnings management has a duality, it is far greater than the negative effects of a positive effect. The extensive existence of earnings management severely aggravated the quality of financial information. The modified earnings information is not able to fairly reveal the financial situation and operating performance, meanwhile, it makes the information less valuable in decision making. This does not only destroy the benefits of information users, but also ruin the optimal allocation of social resources. The phenomenon of "meager profits" does exist in our security market extensively. The reality of those listed companies'account earnings is doubtful, which makes the specific study for the action of earnings management more necessaryThe thesis studies the negative effect of earnings management behavior. The thesis adopts empirical analysis way to study the listed companies with meager proflts in 2006 to 2008, and analyses the action of earnings management totally. Theoretical section describes the definition, characteristics, motives, means of earnings management and the relevant concepts. First of all, the empirical part discusses the characteristics of earnings management of Listed companies with small profit and special motivation, followed by scattering detection method as a starting point, draws net capital gains rate distribution frequency histogram of the Listed companies with small profit for three consecutive years. Es is confirmed that significant earnings management behavior exists in the meager profits of listed companies, thus whether the companies manage the Earning using discretionary accruals can be tested, finally specific means of earnings management are comprehensive statistically descriped and analyzed from Non-recurring profit and loss point of view.The results show that China's low-profit companies exist in the realization of low-profit annual general signs of earnings management, However, in contrast to classic and foreign earnings management tools it has different characteristics, that it is very limited that low-profit companies use to manipulate accruals to manage earnings. In fact, most low-profit companies are not truly low-profit business, But because of the deterioration main business causes loss of competitiveness, thereby deliberately using non-recurring profit and loss items makes earnings management as a way to manipulate the profit gloss over the financial statements, and the remaining deficiencies of the new accounting standards become an important prerequisite to realize the above-mentioned behavior. Based on the above empirical findings, it is discussed that how to curb the negative impact of earnings management at the present time.