Empirical Research On Earnings Managerment By Gem Companies In Ipo Process

IPO (Initial Public Offerings) refers to the Enterprises’initial public offering of shares, it is the enterprise (the issuer) for the first time to sell its shares to the public. It appears to improve the development of a multi-level capital market, to solve the financing problems of small and medium enterprises in China, in particular, provides a favorable platform for financing problems of science and technology GEM enterprises. China’s securities market is not mature enough, securities management system is still not perfect. In order to achieve the high pricing of the IPO and the IPO, the company’s management has a strong incentive to manage earnings by factors such as information asymmetry, corporate performance have declined substantially after the IPO will fell. This means not only mislead investors, but also have a serious impact on the basis of integrity of the securities market in China. In the short term, this behavior has undermined investors’ confidence in investing in the capital markets; In the long term, this behavior is not conducive to China’s capital market resources to optimize the allocation affect the healthy development of the capital market.On the basis of the research methods from domestic and foreign scholars, combined with the characteristics of China’s GEM, using standard research methods first, theoretical elaboration process of GEM companies IPO earnings management behavior, pointed out that various means of earnings management. Empirical assumptions, selected from117GEM companies listed in2010as samples, descriptive statistical analysis, regression analysis. The following conclusions:(1) GEM companies endeavor to obtain a higher issue price to earnings management.(2) GEM IPO corporate existence of earnings management behavior. In order to solve the problem of GEM companies IPO widespread earnings management, according to the research of the author’s modest liberalization of the GEM IPO listing threshold, and constantly improve the formulation of accounting standards system, put forward some reasonable proposals, and finally pointed out the shortcomings of this article and future research directions.