Research On Accounting Earnings Quality Evaluation Of Listed Companies

As a special financial index, accounting earnings is characterized with duplefeatures. For a long time, most people focus on its quantity features but they pay lessattention to its quality features. As a result of a series of exposed financial fraud cases,more and more people get interested in the accounting information as its importanceincreases day by day. Most investors, creditors, governments, employees and thestakeholders are concerning the quality of accounting information of the listedcompanies. Therefore, the accounting earnings, which is regarded as the corecomponent of accounting information, will be of significant importance, and will bethe key basis of the stakeholders’ decisions and the evaluating standard of companybusiness performance for the managers. A financial report with low-quality accountingearnings data will positively mislead the user of the report, resulting in wrongevaluation and decision, and finally causing losses. To these users, it is especiallyimportant to know how to see the real accounting status of the listed companies andhow to evaluate their earnings quality correctly and reasonably.Based on the research findings of home and abroad, this thesis shall first explainthe concepts of accounting earnings, accounting earnings management and accountingearnings quality; then analyze the internal and external reasons for its quality problems;and then take the2009-2011financial data of C7“Machinery, Equipment andInstrument” type listed companies for example, to come to the conclusion of thefollowing major factors by using factor analysis and principal component analysis:growth development factor, sustainable development, cash security factor, creditcapability factor, earnings growth factor, stability factor and safety factor. The evaluation shows: as a whole, the earnings quality of domestic listed companies isworrying because of the tendency of gradually declining, the great difference betweencompanies, and critical polarization. Finally, in accordance with the above analyzedcauses and results, this thesis comes up with the following suggests and measures:continuous improvement of accounting regulations, law system and supervisorymechanism; continuous optimization of company structure; continuous reform ofdisclosure system of connected transaction; enhancing of earnings ability of companies;professional training for accountants; improving of independence, etc.