Earnings Persistence And Reliability Of Accural

Earnings are the cornerston of enterprises’ survival and development. Stable andpersistent profits is not only the core of a company to obtain the stable and sustainabledevelopment, but also the important basis for inversors to evaluating the enterprises’future developmet trendency. Many factors affect the quality of the earnings, earningspersistent is one of the important earnings’ quality index. Therefore, research onearnings persistent has very important practical and theoretical significance.On October23,2009, ChiNext of Shenzhen Stock Exchange started. come here,our country to the Main Board Market, ChiNext, Over-the-counter market and propertyright trading market as the core of the multi-level capital market system were basicallyformed. At present, the enterprise in the multi-level capital market of Shenzhen StockExchange in our country is the typiacal representative of the different scale, differentdevelopment stages. Affected by the United States financial crisis in2008, from2009to2011, the economy of China was complex and changeable, and the change of themacroeconomic environment has become a key factors to influence the companiesmanagement and performance. Especially for Small and Medium Enterprise Board andChiNext, because of the small and medium-sized companies have single business, theydepend more on macro-environment and the industry economic trend, so the businessand growth of these companies under this background worth more attention.In such a context, this paper mainly through a combination of theoretical andempirical approaches to research the earings persistent of the Main Board Market, Smalland Medium Enterprise Board and ChiNext in Shenzhen Stock Exchange. First of all,this paper reviews research literature on earnings persistence of domestic and foreignscholars; then, defines earings persistent, reliability and accruals. Based on thedefinition of earning accrual, this paper combined with the balance sheet and the natureof enterprise basic business activities, and according to the content and the influencefactors of the each segmented accrual component to assess its reliability. Then constructa linear regression model which combines accruals reliability and earnings persistence.This paper selects years of2009to2011on listed companies of the Main Board Market,Small and Medium Enterprise Board and ChiNext in Shenzhen Stock Exchange to makean empirical analysis on earnings persistence, to investigate the relationship between earnings persistence and accrual reliability on different plates.The result shows that, same with foreign capital market, the Chinese listedcompanies also has the phenomenon of the cash flow component is more persistent thanthe accrual component,and the higher reliablility of accrual component the coefficient ofearnings persistence is higher. Persistence of cash flow and accruals in different platespresent different characteristics.In conclusions, this paper submits four proposals basedon theoretical analysis and empirical analysis. Besides, the text summarized theshortcomings in this research, and puts forward some problems to be further studied.