Listed Companies' Earnings Management And Regulatory System

Earnings management is crucial to China's securities market. At present earnings management of listed companies has become the most serious problem that affects China's social and economic development. While in the securities market at present, there are many cases which mistreat earnings management and forge accounting records. Most of the cases resulted from the fact that some companies want to reach the requirement of related supervisory laws and regulations and to be qualified to finance in the market on these faking records. From this standpoint, the supervisory laws and regulations mentioned above is one of the reasons which lead to these misdeeds.This paper provides some basic knowledge of earnings management, lists some material on the ground that leads the earnings management, deeply analyzes the means of earning management and presents the role of the earning management both in the market and economic today. On the level of above actions, the paper starts an investigation on the influence of related supervisory laws and regulations of China's security market on earnings management of listed companies. This paper focuses on the influence of three key supervisory laws and regulations which includes IPO, refinancing and quitting to earnings management of some listed companies in China. The level of return on equity is taken as the main figures in this paper.Through these analyzing and researching, the end of the paper will give some points and meanings to strict the earnings management in listed companies today. The thesis is made up of the following four parts:The first part first gives the significance of this thesis, introduces the concept of earning management and the status de quo of research in this field, and explainsthe relationship between earnings management and supervisory laws and regulations.The second part mainly deals with the basic content of earnings management. It analyzes, in a detailed way, the internal and external motives of earnings management and lists different ways to manage earning and the bad effects of them.The third part is the main body of the thesis and consists of three sections. Each section illustrates the influence of three supervisory laws on earnings management respectively. The content and evolution of the three supervisory laws and regulations, i. e., IPO, refinancing and quitting, are listed and studied on the basis of being combined with the statistic data of listed companies in Shenzhen and Shanghai, among which ROE is targeted as the main goal. The statistical research shows that the three supervisory laws and regulations have great influence on earnings management.The fourth part puts forward some countermeasures and suggestions, based on the results of the above study, for earnings management of listed companies in China: the detailed analyses aimed at perfecting supervisory laws and regulations, accounting standards, corporate governance structure and auditing systems.