The Empirical Study On Earnings Management Of Companies With Meager Profits

As China’s listed companies have grown in strength, surplus management has become a common phenomenon. The existence of this phenomenon affects the quality of financial information, and cannot truly reflect the financial position and operating results, which will make the corporate stakeholders in decision-making trouble. Very narrow margins of the listed company’s stock market is a special kind of group, company performance is often not good, but a little better than the loss company. With the report of the earnings of the very narrow margins of the listed company is just above the limit of profit and loss, they have a motive for the surplus management, so it is necessary to study the surplus management of the very narrow margins of the listed company. In our securities markets, listed companies in the manufacturing sector have very important place no matter in quantity or value; besides, they are strong representative on the stock market. Therefore, this article chooses the listed companies of the manufacturing industry to study.This article mainly include the following four parts:The first part is introduction, introduced the background and meaning, reviewed the research results, and then the framework of this paper. The second part is related theory. This part begins from the definitions, the reason for restraining factor analysis and management of a surplus, and then gives a definition of the very narrow margins; finally make analysis of the motives and means of surplus management. The third part is the empirical research. This article chooses the very narrow margins of the listed company of the manufacturing industry during2004and2009as the sample. First, to use a frequency distribution of the listed company of our manufacturing industry with roe. and then confirmed that there is a surplus of narrow margins of the listed manufacturing companies under the new accounting standards by empirical analysis. The last part of the paper is conclusion and recommendation. The text of the results indicate that the surplus management behavior exits generally in very narrow margins of listed manufacturing companies; Before the new accounting standards, our manufacturing industry of a listed company prefer to use the non-business income and expenditure, investment income and assets minus the value to a surplus management; Under new accounting standards, there is a improvement of narrow margins of the listed manufacturing companies. After new accounting standards, our manufacturing industries of a listed company prefer to use the non-business income and expenditure, investment interest and fair value of the changes to make the surplus management. At last, to make suggestions from the aspect of accounting rules and regulations, the methods and supervision of how to control the surplus management of the listed company.This article has a major contribution to the following two areas:first, choose the very narrow margins companies of manufacture as sample; it is more directed than the past study on the surplus management which chooses all the very narrow margins of the listed companies as sample. The research of this paper has a span of just over by2007, and2007is a year in which our new accounting system connecting to the national system overall. Therefore, this article gives a testament of the main means and methods of tastes and preferences change of the surplus management of the very narrow margins of the listed companies before and after the new accounting standards.