Research On The Relationship Between Financial Assets Management And Earnings Management

Earnings management has always been a popular topic in accounting theoretical research. It refers to the behavior aiming at benefit maximization by controlling and adjusting stated income information on the basis of complying with accounting standards. In other words, earnings management is realized by the choice of accounting policy. Therefore, they are bonded. Since Watts and Zimmerman put forward "three assumptions" of economic motives to chose accounting policy, research on earnings management gradually shifted to the motive view. This paper pondered that the motive of earnings management can be sorted as costing motive, contractual arranging motive and capital marketing motive. Listed companies will make choice on the basis of the motives of earnings management.Since the implement of Accounting Standards for Business Enterprises, the scholars began to look at the financial assets. Among them, tradable financial assets and available-for-sale financial assets of the relevant accounting of the listed company offers enough space for the policy choices.Integrated earnings management of the motives and financial assets management and analysis found that you can make profit smooth, profitable and less loss by the financial assets management. The listed company will be based on the surplus motive for the management of financial assets management in study. This article can be divided into two parts.The first part is theoretical analysis, including the second and third chapter.The chapter 2 consists of three parts. The first part is theoretical analysis of the Accounting Standards for Business Enterprises about the financial assets. The second part is difference analysis between the tradable financial assets and the available financial assets. Firstly, the accounting period when the profit is confirmed is different; secondly, accounting information level is different; thirdly, a different classification of financial assets of the profits of the volatility of the situation is different; fourthly, the earning management is different. Finally, financial assets according to different categories of the listed company, listed companies can be launched on the management of the motives of the financial assets management, including:the listed company tends to the available-for-sale financial assets when they are confirmed; the listed company would sell the available-for-sale financial assets because of earnings management motives, etc.Chapter 3 is a systematic review and analysis about the past study which related to surplus for the management of motive, the relations between earnings management and accounting policy research, the relations between earnings management and the financial assets management.The second part is empirical study which is also the core of the paper, including chapter 4,5 and 6.Chapter 4 was a important connecting link. After theoretical analysis, this paper put forward 4 assumptions. Also, several regression model was reached. Last but not least, variable was defined and explained.Chapter 5 is the verification to the four research hypothesis. It comes to a decision through the select samples for descriptive statistics and regression analysis.Chapter 6 is a generalization to the chapter 5., The paper to draw the following conclusions through study:firstly, based on the earnings management motives, the listed company would be more inclined to available-for-sale financial assets; secondly, the listed company will manage the financial assets based on the earnings management motives; thirdly, the more available-for-sale financial assets are held by the listed company, the more earnings management; fourthly, the listed company still would be more inclined to available-for-sale financial assets in 2010.Empirical research in conclusion, the thesis put forward several proposals:firstly, the listed company should strictly disclose the intention of holding the financial assets; secondly, he listed company should strictly disclose transaction process of the financial assets; thirdly, the fair value changes in the profit and loss should be confirmed in its profits rather than income; fourthly, the investment income of available-for-sale financial assets should be disclosed in the income statement; fifthly, the listed company should strengthen the internal control. Finally, the regrets of study are summarized and the future directions are looked forward to.