China's Listed Companies' Earnings Management Research

The subject of earnings management has been studied for more than twenty years in Western accounting theoretical circle. In fact, is not only an accounting problem but a complicated social one. 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, but its negative effect exceeds its positive effect considerably. Because accounting information has been turned into a kind of number game, it will mislead investors and information users to make wrong decisions. 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 he conception and basic characteristics of earnings management. Secondly, it analyzes the motive for earnings management and the precondition of earnings management. Finally, it illustrates the tactics and means of earnings management.The second part analyzes the peculiar situation of listed companies in our country. In the beginning, the motive of earnings management peculiar to China is introduced. Then, it discusses the common ways of earnings management in listed companies through theory analysis combined with case analysis. At last, it illustrates the positive and negative effect of earnings management.In the third part, some constructive suggestions are made to solve the problem of earnings management according to the engendering conditions of earningsmanagement in our country. Firstly, we should perfect our accounting standard and accounting system. Then, corporate governance should be enhanced to create an internal constraint mechanism against the excessive abuse of earnings management. Finally, external auditing efficiency should be strengthened to intensify the supervisory function of CPA.Clearly, it is impossible to solve the problem of earnings management 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.