Research On Ipo Earnings Management And Economic Consequences

Earnings management is an important field in modern accounting theory research, it has been always the focus of the accounting profession, and in the study of earnings management motivation, IPO earnings management research is an old topic, scholars at home and abroad for many years have made a lot of detailed studies on IPO earnings management problems, they found that companies universally implement the earnings management in order to IPO successfully, but the most of them are only based on the research of accruals earnings management. Earnings management can be implemented in two ways, namely the accruals earnings management and the real earnings management, scholars found that after the SOX act, the company prefer to the real earnings management in the choice of earnings management because of its concealment. As the country’s new accounting standards promulgated after2007and the related legal system to be perfect, the implementation of accrual earnings management become more difficult and the space that can be adjust become narrow, the enterprise will prefer to use real earnings management in the process of IPO. In recent years, phenomenon that the enterprise performance after IPO will decline is serious. In the end of2012, the action that IPO enterprises in our country were examined by the CSRC, called "the most severe financial verification storm" make phenomenon of the Chinese IPO companies earnings management become the social focus again. This article will study on the earnings management behaviors of IPO firms in China combine with view of real earnings management in recent years and analyze the economic consequence caused by the different ways of earnings management.Based on initial public offering of the company in2007-2012as the research sample, this article studies on behavior of earnings management in IPO firms and its economic consequences in the view of accrued earnings management and real earnings management, including its impact on the company’s operating performance and market performance after IPO. The research results show that in the first place, the company made clearly earnings management behavior in the process of IPO, not only implement the accrued earnings management, but also implement the real earnings management, ways of real earnings management include sales control, production control, cost control, and in recent years, the IPO companies in order to hide the "profit manipulation" motive, tend to use real activities manipulation instead of accrual earnings management to increase the surplus. Research also found that IPO companies in the implementation of real earnings management, is not always for the purpose of improving the surplus. real earnings management can not only help the IPO firms to raise the level of surplus, but also at the expense of the lower part of the surplus, relevant enterprises some positive signals to the outside world, such as a negative cost control that increasing r&d investment can transmit its "high growth" signals to the outside world. Second, the implementation of accrued in the process of IPO earnings management and real earnings management behavior has a negative impact on future corporate performance, relatively obvious, the influence of real earnings management as a result, real earnings management may have contributed to the company performance is the main reason for the "suddenly turn hostile" after the IPO. Concrete analysis shows that the company’s production control behavior for three years after the IPO performance have obvious negative impact, and sales control and cost control in the future the influence of operating performance after the IPO three years did not appear, this may be due to the sales control and cost control to the enterprise in the future the influence of operating performance after a longer time to show it. Finally, the study also found that IPO earnings management has the negative impact on the enterprise market performance after the IPO. The impact of real earnings management is more obvious.