Research On Earnings Management Before Public Offerings Of Listed Companies

This research is to study the earnings management of listed companies before its public offerings. And it’s based on the regulatory policy. In the theoretical analysis part, we summarize the development of our regulatory policy of public offerings and so on. Besides, we analyze the motivation, methods and results of the earnings management in public offerings. In followed empirical analysis part, we uses related samples with adjusted Jones model to measure the earnings management in public offerings. With this calculation, we can learn about the existence, direction and development of this earnings management. Besides we analyze and check the ROE distribution of all listed companies in Shanghai and Shenzhen A market from2000to2011. And discovered that the regulatory police is the main motivation of earnings management in public offerings. At the end, the auther calculated the excess ROA and found out that though regulatory policy would cause the earnings management in public offerings, the policy can pick out well behaved companies compared to market performance. After giving conclusion to the empirical test, the auther listed several advice to reduce such management.