The Research On The Relationship Between CSR And EM

In recent years, the earnings management (EM) made by the listed companies have seriously harmed the shareholder's and other stakeholder's benefits. The enterprise should not only purist of the maximizing of the stakeholders'wealth, but also consider the welfare for the employees, customers, creditors and the related stakeholders. The enterprise's emphasis on the related stakeholder's benefit is an important content for corporate social responsibility (CSR). Based on the economic transition situation in China, this thesis is to discuss the relationship between CSR and EM in the level of accounting. Through understanding the motivation of earnings management and influence, which is behind the managers'fulfillment of CSR, the supervisor can specify enterprise's social responsibility behaviors and improve the transparency of financial information.This paper firstly summarizs lots of domestic and international documents about CSR and EM,drawing on the experience which is how to measure the variables of CSR and EM.Secondly present three assumptions and build a simple linear regression model,using the extended Jones model to calculate EM as being representative of the explanatory variable,while CSR score, ROE, asset size,LEV and the equity ratio as explanatory variables.At last use the 397 industrial companies of the Shenzhen A share as the sample,test the hypothesises with SPSS16.0.The conclusions:There is a negative relationship between CSR and EM in the CSR-minded companies;while the profitable firms want to create a stable image,have increased the amount of resources allocated to activities classified as CSR,using earnings smoothing.In this situation,there is a positive relationship between CSR and EM.Some companies in order to obtain the placement shares of eligible allotment or turn a loss-making enterprise into a profitable one ,so there is a positive correlation between CSR and EM.While ROE,assest,LEV and equity ration are not apparent in the test.Finally,it points out that the strength of corporate social responsibility is relate to the extent of EM based on the empirical analysis,therefor affecting investors,employees,customers,government and other stakeholder interests.With the empirical analysis results,it gives some guidance to managers for practice.