Issues Related To Earnings Management Research

The subject of earnings management has been studied for more than twenty years in Western accounting theoretical circle. With the development of stock market and the surging of listed companies in our country, earnings management turned up in listed companies, which has become one of the new subjects of accounting theory and practice in our country. Earnings management has positive and negative effect on our economy. However, earnings management has been abused to such an extent in listed companies that its negative effect exceeds its positive effect considerably. Hence earnings management has become one of the most important causes for accounting information distortion. In order to solve the problem of accounting information distortion and promote the development of the stock market, it is necessary to probe into the issue of earnings management in listed companies. Considering this point, the thesis tries to study the subject from several major perspectives.The thesis is divided into three parts altogether:The first part introduces the fundamental theory of earnings management. Firstly, it illustrates the conception and basic characteristics of earnings management. Secondly, it analyzes the motive for earnings management in foreign countries and the motive peculiar to China. Finally, the positive and negative effect of earnings management is discussed and on basis of this my viewpoint is presented that the problem of earnings management hi listed companies should be dealt with and put under control.The second part illustrates the tactics, means and detecting methods of earnings management. In the beginning, the tactics of earnings management are introduced. Then, it discusses the common ways of earnings management hi listed companies through theory analysis combined with case analysis. At last, nine detecting methods are presented from the perspective of accounting information users so that accounting information users can perceive traces of earnings management in listed companies.In the third part, some constructive suggestions are made to solve the problem of earnings management according to the engendering conditions of earnings management in our country. Above all, corporate governance should be enhanced to create an internal constraint mechanism against the excessive abuse of earnings management. Then, we should perfect our accounting standard and accounting system. Finally, auditing monitoring and security supervision should be strengthened to establish an external constraint system against earnings management.Earnings management in listed companies is not only an accounting problem but a complicated social one. Therefore, it is impossible to solve the problem through the enhancement of one respect alone. Comprehensive measures should be taken by various departments concerned to solve the problem and promote the smooth and systematic development of the stock market and the economy accordingly.