Listed Companies' Earnings Quality Evaluation System

Accounting earnings is the key index in all accounting information,which not only reflects the past outstanding achievement,but also forecasts the growing prospect of listed companies combined with other indexes.After the publication of annual financial reporting of listed companies,investors usually evaluate the achievement of different companies by accounting earnings index when they select objects in numerous listed companies.In securities market , legislation and administration institutions value and supervise the whole course from coming into the market to exiting from the stock market by earnings index.Recognition of the stock listed company,the confirmation of issuing price,absorbing new capital from market,ST and PT, which have osculation connections with earnings index.Due to the importance of earnings index in evaluating the managing achievements and gaining ability,some listed companies often manipulate earnings index.For example,the managers color financial reporting in order to enhance issuing price before coming into the market;the managers manipulate earnings management to obtain share allotment qualification or avoid being deficit in three years;on the side,the managers tend to manipulate earnings for their interests.The measures and methods of earnings manipulation in Public companies are more and more,for example, affirming earnings in advance,altering means of accounting operation , the recombining of assets,related deals.The financing data of earnings reporting cannot reflect the truth,which cannot forecast things in the future.Without good quality,the earnings losses reference value .The low quality of earnings will mislead investors and bring them serious lose.Accordingly , The traditional evaluation indicators of listed...