Research On The Impact Of Political Motivation To Earnings Management Of Listed Companies In China

From the accounting scandals of Enron in the United States to the accounting fraud case ofYinguangxia and Lam shares in China recent years, a series of vicious practice warns people ofharm arising from accounting information distortion. In addition to the accounting fraud, corporateearnings management is as well as the major source of distortion of accounting informationEarnings management has not only become the focus of widespread concern in the community,also become scholar’s hotspot. The impact of the political motivations to earnings management hasnot been seriously treat, basic stay in looking for evidence of earnings management in manystudies of earnings management. However, due to the special political environment in China, thepolitical costs often play an important role in the development of enterprises, so research in-depthon the impact of political motivation to earnings management of listed companies in China hasimportant theoretical and practical significance. Theoretical significance: firstly, it plays acomplementary role to the earnings management theory, this research belongs to the scope of thepolitical motives of earnings management. Secondly, it plays a complementary role to the theory ofcorporate governance. Practical significance: firstly, it is helpful to improve the quality of earnings,and to improve the quality of accounting information, to provide accurate information for decisionmaking of investors. Secondly, it can help policy makers to make more rational policy. Thirdly,help to achieve the sustainable development of China’s listing corporation health, through thepolitical motivation of earnings management in the implementation of China’s listing corporationfor the purpose of earnings management behavior, can optimize the corporate governance structureof enterprise, standardize enterprise management behavior, and ultimately achieve healthy andsustainable development.The purpose of this research is to study the impact of the political motivations of earningsmanagement of listed companies in China, for the different effects of different factors to takedifferent measures to regulate the behavior of earnings management. To achieve this objective, thisstudy launches from the following aspects. Part I: Introduction, the first part of this paper describesthe background, purpose, meaning, and domestic and foreign literature study, this study can bebuilt on the basis of previous studies. Then introduce the main content of the research and researchmethods. Part II: Concepts and theories, the second part introduces the relevant concepts andtheories, including the concept of earnings management, and political costs; income theory,efficient market theory, principal-agent theory, game theory and other theories as a basis for future research. Part III: the third part analyzes the current situation of listing Corporation politicalmotivation and earnings management in China, providing support for the next research. Part IV:From the theoretical point of view, analyze the impact of the political motivation of earningsmanagement of listed companies in China from the micro and macro perspectives. Part V: This partuses the index of total assets, the rate of return on equity, the natural logarithm of listingcorporation, the economic impact of the market index, and the proportion of state-owned shares aspolitically motivated alternative variables, to explain the extent of earnings management in China’slisting corporation. Part VI: Based on the above research results, this part puts forward suggestionsto regulate earnings management of listing corporation in China under the influence of politicalmotivation, including setting reasonable performance evaluation index, improving the corporategovernance structure, reforming the local government performance evaluation system, acceleratingthe construction of market economy, the government intervention in the economy. Part VII:Conclusions. Earnings management in the political motivations influence listing corporation maybe adjusted downward earnings management may also to adjust, this is because the politicalmotivation of each factor on the impact of China’s listing corporation, regardless of the degree ofearnings management or direction from all have their own characteristics, its appearance is theresult of a complex interaction of the factors of political motivation. And the western scholarsbelieve that the political motivation will lead to a conclusion that downward earnings managementis different, this is determined by the special national conditions of China.