Empirical Study On Ipo Earnings Management Of The Listed Company In GEM

Small and medium enterprises (SMEs) in our country have been faced with thedifficult problem lack of productive capital in the development process.Although Chinesecapital market and venture investment is being maturing in recent years, the SMEs’productive capital problem has not yet been fundamentally resolved due to financialcrisis and strengthening commercial banking risk control awareness.It is on October23,2009that the Growth Enterprise Market (GEM) of China formally opened on theShenzhen Stock Exchange,which is to support the industrial development of efficienttechnologies. GEM not only becomes a new funds channel for technology-intensiveenterprises with high-tech as the core competitiveness, but also provides a new platformfor venture investment.The GEM has had an important influence on the development ofcompanies and securities markets. Up to the end of2011, a total of286SMEs have beensuccessfully listed in GEM.However, it is not easy for many SMEs to obtain financing qualifications in GEM. Inorder to protect the interests of investors, our country set certain conditions of applicationabout the first time public offering and listing of SMEs in GEM in many aspects such asownership, operation duration, size of the company, the total share capital and corporategrowth. These qualifications will undoubtedly increase the difficulty of fund-raising, andalso force the management of the enterprise to take earnings management action infinancial reporting. In addition, even if the companies had the the phenomenon ofearnings management when they had initial public offering and listed on the Main Boardwith the development of more than20years. The GEM that has just started isimpossible to avoid the occurrence of earnings management behavior.Firstly, IPO earnings management theories are elaborated on the basis of theintroduction of the earnings management literature. Secondly, according to thecharacteristics of the GEM, the article adopts the method that combines the extendedJones model of Receipts in advance with Jones-CFO model. Select the date of87samplecompanies with initial public offering in2010and listed on GEM board from2008to 2011. Then speculate that it exists the possibility of earnings management performanceaccording to performance of these companies before and after the IPO. After that,analysis the lever of earnings management before and after the IPO. And then, doempirical research on earnings management behavior factors. Finally, some suggestionsto improve the reliability of financial reporting and reduce earnings managementbehavior of the enterprises liste in the GEM will be given based on the theoretical basisand empirical results.