Research On The Evaluation Of Earnings Quality Of Listed Companies

As the most important part of the corporate accounting information, accounting earnings are critical financial indicators to analyze and evaluate business conditions. Financial fraud cases of listed companies frequently make earnings quality gain much concern. The main reason why the listed companied have worse earnings quality is that earnings management exists in the companies. The management often use kinds of measures to change earning, which misunderstands stockholders and creditors, destructs capital market order. Research on earnings quality can help understand accounting earnings of listed companies more objectively and comprehensively, and have far-reaching significance on regulating development of capital markets, improving corporate earnings quality, protecting legitimate rights and interests of all stakeholders in the listed companies. Therefore, How to evaluate earnings quality of listed companies objectively and maintain normal capital market order is a very important issue.Both normative and empirical research methods were applied in this study. The first part describes the meaning and background of earnings quality. The second part does brief review of the theory of earnings quality, define the definition of earnings quality, core quality characteristics and influencing factors. According to core quality characteristics, the third part selects15evaluation indicators of earnings quality to design earnings quality evaluation index system. After screening, the fourth part selects46new energy listed companies as our sample, base on2008-2010financial data, use factor analysis method to make an empirical analysis. We find the following results:(1)A11the evaluation indicators of earnings quality can be taken by five factors.(2)Profitability is the most important aspect that affects earnings quality of corporate. The effect of earnings persistence and growth on earning quality is second only to profitability. The effect of cash benefit indicators and safety indicators on earnings quality gradually strengthens, and the important on enterprise development can not be ignored.(3)The overall situation of earnings quality of new energy companies has improved for the last three years and have polarization trend.(4)The ranking of earnings quality is inconsistent to the one of earnings per share. Therefore, we put forward some proposals to improve effectiveness of evaluation on earnings quality of listed companies.