Local Government Grants And Earnings Management Of Listed Companies

In the year of 2007, from the outbreak of the financial crisis sweeping the United States, almost the whole earth, and finally formation of a global economic crisis, many economies have been more or less. China’s economy is no exception, many enterprises has been greatly affected, especially those oriented to exports and processing units, but fortunately the Chinese government can take to stimulate domestic demand to reduce the impact of the economic crisis. In order to stimulate domestic demand as soon as possible, the Chinese government launched the "4 trillion" economic stimulus plan and the ten industrial revitalization plan, the budget adds up to the local government has more than 18 trillion. The central government in China are generally fiscal policy, and local governments through the implementation of specific policies to form a direct control of enterprises. In this context, research the local government intervention in business decision-making, direct government subsidies, especially motivation, have a strong practical significance.In recent years, with the local government subsidies given to listed companies, more and more market economy in China have formed a unique phenomenon of earnings management-the use of government subsidies many listed companies to increase profits, so the local government and enterprises The relationship has become a research hotspot in many scholars. From the perspective of local government, the Chinese government and enterprises between the intricate relationship between the natural, to the listed companies offer a variety of local government subsidies, one can interfere with the listed company’s economic activities, thus to guide inhibit the development of the industry or the occurrence of some economic activities, on the other hand subsidies to protect the local listed companies to the capital market through the fact, re-financing, so that the local set a good investment environment, more places to pull of investment, thereby enabling local economic prosperity. From the perspective of a listed company, the securities regulatory authorities of the company is listed, such as issuing new shares and the allotment, there are stringent eligibility requirements and regulations, so most of China’s listed companies have local government support and cooperation of the local outstanding enterprises, Therefore, the time from the creation of listed companies and local governments beginning there is some connection. Listed companies hope to increase operating profits in the short term, which if only by increasing the Extraordinary is almost impossible to achieve at this time if the local government subsidies, this occasional change in local government will soon grant business performance, so that enterprises from loss.This is a double-edged sword that the government grants, government grants, there are some negative effects. Many listed companies in China had not yet listed, or placement of shares eligible for issuance, but strong in local government "support" under a lot of money to obtain cash in, which to some extent disrupted the health of China’s securities market, and orderly. Use of the local government subsidies or grants of public resources to specific companies, this is not conducive to the improvement of the competitiveness of enterprises is not conducive to the formation of a fair, just and open market environment, there are a number of listed companies if the effective period of protection can not be led to the formation of their own within a competitive business, they may be dependent on government protection or support. With the new accounting standards starting in 2007, the implementation of the listed companies, to a certain extent, curbed the use of government subsidies listed company earnings management motives, but there are still some need to be perfected.This article listed companies on the local government research grants, research includes the following eight areas:The first chapter is an introduction section, topics including the background, purpose and significance of the study, research ideas and frameworks, research methods; s ChapterⅡLiterature Review section. This chapter reviews the domestic and foreign listed companies in recent years to obtain government grants on the relevant research results, and relevant literature is reviewed to determine the research questions. Chapters III and IV of the content of the theory of government grants for this study pave the way, introduces the two parts:first, government grants and theories related to accounting standards, including guidelines for the Chinese government grants history, the theory of government grants and local government subsidies to enterprises of specific practical significance; followed were using government subsidies to local governments involved in the reasons for earnings management of listed companies, means and influence and government subsidies of listed companies use the reason of earnings manipulation, common method of analysis, the part of the contents of paving the way for the following; The fifth chapter is a descriptive statistical analysis and case studies, first introduced the study sample selection and data sources, followed by the listed companies and listed companies by industry sector Office areas are descriptive statistics, and through case analysis, to illustrate to some extent the local government in some way involved in the earnings management of listed companies to make profits of listed companies to increase or turn around, and further from the long-term point of view of the government grants the impact on listed companies; sixth chapter is the analysis of new accounting standards No.16-Government subsidies, indicating that the Standard prescribes a listed company after receiving the accounting treatment of government grants, reflecting the new guidelines in stamp Listed companies use government subsidies to manipulate the role played by profit, and perfecting the relevant guidelines, rules and regulations and to further increase the strength of securities regulation, offer some suggestions. The end of Chapter VII, including: research findings, policy recommendations and research innovations and limitations.This study has some exploration, academic contributions in the following areas:research topic has a certain novelty, with effectiveness data; the analysis of the research process-oriented theory, analysis, and discover the local government The use of government subsidies in the reasons for earnings management of listed companies, and research and with typical use of standardized case study; study the introduction of new accounting standards No.16 in the (government subsidies), old and new accounting standards on the accounting treatment in contrast to Reflects the new accounting standards and scientific.