| Financial instruments accounting has become a hot research field of accounting scholars, but also become one of international academic accounting problems. On November12,2009, the International Accounting Standards Board (IASB) issued the "International Financial Reporting Standards No.9-Financial Instruments", the classification of financial assets proposed new method that according to the fair value and amortized cost to reduce the complexity of financial instruments accounting and improve quality of financial reporting. The change about Accounting Standards of China in the classification of financial assets is imperative. However, blindly following the trend is not desirable, because in China the market is not maturity. So we need to develop accounting standards about financial instruments based on not only trends of international accounting but also China’s national conditions. In addition to holding to held-to-maturity investments and loans and receivables are classified more specifically, corporate accounting standards did not provide a clear basis for classification of financial assets, providing that the classification about for trading financial assets available and for sale financial assets and the classification depends on the company’s management intent, what makes the division confused. Furthermore, trading financial assets and for sale financial assets measured at different follow-up to have different effects on net profit of enterprises. Therefore, there is how the two categories of business accounting policy choice.This paper consists of the following five parts:The first part is the Introduction, including the background and significance of research, literature review, and research content and innovation. The review includes foreign and domestic, earnings management and accounting policy choice. It is not difficult to find that there was a correlation between the choice of accounting policies and earnings management by literature review and comments. But contents of the study are mostly concentrated in the asset impairment of the impact of earnings management. Therefore, this paper is from the perspective of financial assets classified to study the earnings management of listed.The second part is the theoretical analysis. The part explains the concept and classification of financial assets, and analyses the meaning, the possibility and necessity, motives and methods of earnings management. Then through analyzing the principal-agent theory, information theory, the Ministry of symmetry and contract theoretical, the paper is tring to find the theoretical origin about the relationship between accounting policy choices and the earnings management. In the end, this part compares the trading of financial assets and financial assets available for sale accounting treatment, and finds that there is motivation for corporate management to select accounting policies for earnings management. They tend to classified as financial assets available for sale financial assets.The third and fourth part is empirical testing and analysis, based on the theory. The part puts forward the four assumptions about earnings management and motivation, selects546listed companies’ annual data in2007, uses descriptive statistical analysis, correlation and regression analysis method to verify whether there is earnings management with classification of financial assets in listed companies, and to find out the motivation of earnings management.The fifth part is the research findings, policy recommendations, and lack. By empirical analysis, China’s listed companies are more inclined to financial assets classified as available for sale financial assets. There is a choice of accounting policies for the use of earnings management behaviour, and profitability, allotment status and income smoothing motives of the three earnings management hypothesis to be confirmed. Finally, the paper put forward specific policy recommendations, and the inadequate of the study. |
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