Research On Earnings Management From The Angle Of Corporate Social Responsibility

Accounting information is an important basis for the capital market to play a basic role in resource allocation. However, the frequent accounting scandals in recent years and theoretical results show that managers will engage in a variety of purposes over earnings management, thereby misleading investor’s judgment and seriously affecting the capital market allocation of resources. The nature reason of earnings management is the lack of business ethics, and corporate social responsibility is just the proper meaning. Corporate social responsibility will improve the corporate governance structure, and thus achieve the earnings management governance role. On the other hand, corporate social responsibility will increase the company’s reputation, send the positive signal to the community, and thus conceal the negative signal from their earnings management, which makes corporate social responsibility may help corporate earnings management as an asylum tool. Whether CSR play an governance role or an helpful role on earnings management, or when the governance role of CSR will convert to helpful role, which will be further analyzed from the perspective of Game Theory, and validated through empirical test. This not only proposes a new idea on the governance means of earnings management, but also has important significance on improving the efficiency of capital markets. Besides, it also can provide some reference to fulfill the norms and disclosure mechanisms of corporate social responsibility.This paper firstly summarizes lots of domestic and international documents about KM and CSR and determines the EM and CSR measurement methods. We also find that the research on the relationship between EM and CSR are very few. Secondly, combined with corporate governance, signal theory and game theory, we theoretically analyze the relationship between EM and CSR and put forward three hypotheses. Finally, we selected1136companies listed in Shanghai and Shenzhen as the as the research sample, using SPSS20.0software for further regression analysis. The results show that, generally speaking, corporate social responsibility play a governance role to the earnings management, but when the company is very strong incentives to manage earnings, this governance role will be weakened, and even become asylum tool. Besides. compared with non-state-owned enterprises, state-owned enterprises have special public nature, the CSR is more interested in governance role.