Listed Companies' Earnings Management Standardized

Earnings Management is a behavior conducted by management personnel to maximize some certain benefits that chose accounting policy or control discretionary accruals within the limits of accounting standard and accounting principle in order to change the financial results. The article discusses how to regularize earnings management of Chinese listed company with the separate viewpoints of law; accounting standard; accounting principle; security supervisor committee; professional criteria of Certificated Public Accountants; related party transactions and assets restructuring.Management personnel use the professional judgment and manipulate transaction to change the discretionary accruals in order to conduct earnings management, including misusing the principle of prudence to make the provision wrongly for impairment loss of eight assets; recognize expenditure of revenue wrongly; changes in accounting policies and accounting estimates and corrections of accounting errors; related party transactions; assets restructuring etc. Earnings management lessens authenticity seriously, increases the development risk of Chinese listed company, and decreases the profits of investors, creditors and the government. So we should take such measures as perfecting accounting information disclosure system, perfecting the security market regulations, optimizing accounting regulations, rationalizing the management structure of listed companies, and increase the independence of Certified Public Accountants.