| The word "earnings management" was born in foreign countries at19th century, it has no praise or blame meaning. In fact, the appropriate earnings management is beneficial to improve the quality of accounting information, accounting surplus information can reflect the company’s economic value, however, since earnings management first appeared in China, it showed a strong Chinese characteristics, being abused by most of the listed companies, which reduces the quality of accounting information and seriously influence the optimal resource allocation function of the capital market. Therefore, under the environment of our capital market formation mechanism, research of earnings management could promote related parties to put forward solutions of tackling both the symptoms and finally improve the capital market in China.After inspection of the2008-2011Treasury’s accounting information quality,I found that the real estate industry has always been the yearly check of the key industries for accounting information. I also revealed that the main means of the real estate industry’s earnings management including cost less than income, net profits smoothing, advance payments, tax evasion, and so on. Among them, the tax avoidance motivation has been the main purpose of earnings management.Existing empirical literature has repeatedly proved that widespread earnings management behavior of listed companies in our country. However, empirical research on earnings management articles for a particular industry is less. The real estate industry has been an important pillar industry of national economy and people’s livelihood relations, what is the degree of that industry’s earnings management? And what kind of motives does that industry mainly have? Research of these two problems not only has important theoretical significance, but also has very distinct practical significance.This article is divided into six parts:Part One:Introduction. This part expounds the author’s selected topic background and significance, research content and methods. Part Two:Literature review. This part include the perspective of both at home and abroad, respectively expounds the earnings management literature review and the accounting research literature review-taxable income differences.Part Three:The Theoretical Analysis of Earnings Management. This part first explains the concept of earnings management, characteristics and types; Secondly expounds the theoretical basis of the earnings management, also the main methods and market consequences of earnings management; Finally this paper discusses the characteristics of real estate industry earnings management and motivation.Part Four:The Theory Analysis of the Accounting-Taxable Income Difference. This part is made up of the reason of the taxable income differences, accounting and taxable income differences and its relationship with earnings management.Part Five:Empirical Study on Earnings Management and Tax Incentives of the Real Estate industry. In this part, I have used the extended Jones model, the non taxable accounting-tax income difference measure model and tax incentives of earnings management research model, which verify the following assumptions:Hypothesis1:Influenced by the financial crisis from2008to2009, the real estate industry’s performance declines, then it favours positive earnings management; During the period of house prices soaring from2010to2011, to avoid excessive attention of real estate industry and the government macroecononic regulation and control, the industry tend to have negative earnings management to defer accounting surplus;Hypothesis2:2008-2009, the non taxable accounting-tax income difference is significantly positively related to surplus management, namely based on the real estate industry tax incentives for earnings management.Part Six:Research Conclusions and Policy Recommendations. This part includes the research conclusions, policy recommendations, and further research direction of this article. |
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