Based On The Fair Value Of The Listed Company Earnings Management

One of the biggest highlights of the new accounting standards which has been introduced in 2006 is the re-introduction of the fair value. Because of the immature market environment and regulatory mechanism, this action triggered a lively discussion about the fair value. Supporters think that fair value can improve the quality of the accounting information greatly, and opponents argue that fair value is likely to become a tool for the companies'earnings management. Throughout the studies on whether to adopt the fair value for earnings management at home and abroad, more and more scholars are focus on this issue both in terms of normative analysis or empirical test.This article will use the method which combined with the specification and empirical to research the earnings management issues that based on fair value. First of all, the research literatures about fair value and earnings management both at home and abroad are collected and summarized, which is to determine the idea and method of this article. Then I analyzed the possible impact the fair value given to earnings management theoretically according to new accounting standards in China. The samples which may have the earnings management are selected from Shanghai Stock Exchange Shenzhen Stock Exchange, hypothesis of this study is proposed and the model is constructed. I use the correlation analysis, regression analysis method to test the proposed hypothesis and demonstration and finally, policy recommendations are proposed on how to reduce action that using fair value to take earnings management.