Online Game Methods And Motives Of Earnings Management Research

In academia, the topic of earnings management has been researched for about 30 years. In domestic financial economics and accounting academics, most researchers focus on listed companies which are deficient in comprehensive and integrity. In addition, with the booming development of marketing economy, both listed companies, modern enterprises and family businesses, are increasingly concerned about earnings management. Moreover, having a full grasp of earning management in different types of enterprises, the makers are able to supervise and control the market and promote its healthy and sustainable development.Foreign investment bank, Digi-Capital, recently released "2011 Global Video Game Investment Report ". When Tim Merel, the managing director, talked about investment in the game of China, he said the revenue of online and mobile game in Asia-Pacific region and Europe would account for 90% in the whole world while China, not America, will dominate the global games markets in the future. According to changes happened in game market between 1998 to 2010, the global game revenue and developing trends were analyzed in this report. The Report pointed out that the top 10 investments accounted for 60% of total games investment in 2010, with a fundamental shift to online/mobile games company investments. Thus it can be seen that investment will be focused on the online / mobile games. The rapid growth in China's online game industry leads to the common growth of relevant industries, which proves that online game operating chains with Chinese characteristics are being formed. Nevertheless, the entire online gaming industry cannot develop without capital operation and earnings management.However, the online game as a new economic form- virtual economy, its motives and means of earnings management are different from the traditional industries. We found that the main motives in many online games are to obtain high-tech and technology titles, transfer profits and financing. They build and strengthen R & D, form intangible assets, increase R & D expenditures and through income adjustment, asset impairment and affiliated transactions to achieve earnings management. These means will result in access to government support, tax benefits and venture capital.Contrast with the related research in earnings management, this thesis has two creativities.i. The creativity in perspectiveIn the past, researchers tend to focus on listed companies from macro view which lack operability for online games enterprises. However, this thesis analyzes the environment, define the connotation, element of revenue model and create the analysis framework of motives and means, which have practical significance.ii. The creativity in contentsTill now, there is no article focused on earnings management of online games companies, so the topic itself is creativity. The innovative is mainly embodied in two aspects: one is the special nature of earnings management motivation, general motivation of earnings management are lack of applicability of the industry, and a detailed analysis of this online game operator's business environment and profit model , laid a special basis to study the motivation of earnings management; on the other hand is a summary of special means and methods used by the online game business, the current majority on the Earnings Management on the traditional industries and listed companies or directly for a case study of a specific traditional means, and thus has practical significance for the online game operator.