Research On The Listed Company Connected Transaction Pricing

With the development of our national economy, the number of listed companies increases rapidly and the connected transaction pricing of listed companies has become a hot topic. Fair connected transactions can not only reduce transaction cost, but also avoid the information asymmetry and enhance asset profitability. But now when talk about connected transactions of listed companies, people often deem them as "favoritisms", fraud" and "false information" etc. Theoretically, though taken as internal control behavior, the connection transaction does not belong to the category of internal transaction; it is a neutral economic category, a market behavior, but not merely a market behavior. In actual processes, due to the characteristics such as uncertainty of the transaction behavior resumed by affiliated parties, the unfairness and concealment of transfer pricing, and supervision difficulty etc, connected transactions can easily cause the profit damage to small and medium-sized investors even to the state. Therefore, to ensure connection transactions fairness and justice and prevent darkroom operation, it’s important to have a fair and effective connected transaction transfer pricing mechanism.On the background of reviewing related documents, this thesis firstly makes a brief introduction to affiliated party, connected transaction, transaction type and transfer pricing in connected transaction. Then the thesis analyzes the relative factors that affect transfer pricing in connected transaction, and the current existing defects, including the internal and external factors influencing transfer pricing decision in connected transaction, the selection of connected transaction pricing methods, the decision procedure of connected transfer pricing, decision risk control, and the information disclosure of connected transaction transfer pricing.Then, on the basis of related description and statistic analysis, this thesis empirically analyzes and confirms the earning management behavior and tax avoidance behavior in transfer pricing decisions in connected transactions. In the thesis, the author selects1861samples from domestic A share market during the period of2008to2010, and by analyzing the feature variables distribution of the sample companies, the author find the features of the earning management behavior and tax avoidance behavior of the listed companies in using transfer pricing mechanism in connected transactions. The results indicate that, listed companies obviously exist the earning management behavior by using transfer pricing in connected transaction; listed ST companies and companies with rationed shares evidently realize making up the deficits and getting surpluses by transfer pricing in connected transaction; there may exist the behavior of transfer profits in listed companies controlled by absolute large shareholders by transfer pricing in connected transaction; listed companies also has the motivation of tax evasion by using the difference between transfer pricing in connected transaction and tax rate.Finally, based on the above analysis, the thesis finds the deficits in domestic connected transactions and makes suggestions to improve transfer price in connected transactions.