A Comparative Study Into Earnings Management In Electric Listed Company Under Changes Of Accounting Standard For Business Enterprises2006

Earnings management is a behavior that the authority makes conscious use of the accounting policies and the option of the accounting estimates, which will affect financial reporting data. The promulgation of the new accounting standards in2007has lead to changes in the earnings management. The electric industry has distinctive characteristics and plays an important role in the national economy, of which the earnings management behavior is necessarily to be studied.This paper analyzed the earnings management of electric listed companies, summarized the characteristics of the electric industry and the motives of the earnings management. Moreover, this paper summarized the changes of the old and the new accounting standards. And electric listed companies’modification in the earnings management is analyzed through specific standards. In the empirical study, we selected a specimen of forty three electric listed companies except ST, and the existence and the means of earnings management in electric listed companies is analyzed through the specimen’s financial data from2005to2010.In this paper, we adopted aggregate accruals approach, using the modified Jones model to calculate the maneuverable accruals, and analyzed whether the earnings management of electric listed companies exist. We set a multiple linear regression model in which the absolute value of the maneuverable accruals is dependent variable, and the independent variable includes Income from main operation, impairment of asset, investment income and net profit from non-business operation. The preferences of the electric listed companies’earnings management is analyzed through the comparison of model coefficients.