Asset Impairment Policy Research Based On Earnings Management

Earnings management problems that exist in the enterprise’s economic activities have always been paid much attention to in society, and it damage the quality of accounting information, do harm to the rights and interests of various stakeholders, which is unfavorable to the normal operation of the enterprise’s economic and management activities. Managers will consider different motivations, in order to meet the needs of the business activities and achieve stakeholder’s requirements. They usually modify the company’s financial performance, appropriately conducting earnings management. The earnings management behavior in listed companies has become a universal and damaging phenomenon, which leads to the information distortion of financial statements of listed companies in our country. It seriously affects the healthy development of capital market in China.Operating asset impairment is one of the means of earnings management activities available, and public company take advantage of subjective judgment and the imperfect conditions of the Chinese market to carry on the earnings management behavior, which leads to more research and thinking on this topic.In2006new accounting standards about the asset impairment was issued in our country, and the implementation of accounting standards for companies of No.8—the asset impairment standards, which marks China’s asset impairment policy appears significant change. Correlation is very important in accounting information quality, in order to accurately reflect the actual value of the asset, so that users of financial information can properly make investment decision and management decision. The implement of new rules inhibit earnings management behavior in some extent, but it can’t fundamentally eliminate earnings management behavior. Due to our country’s special national conditions of the immature market environment, the implementation of new standards forms a new influence on the earnings management behavior. Companies still use a variety of means to operate profits, through the provision and turn back of impairment, which cause a negative effect. It causes the attention of many scholars to explore how to reduce earnings management space, and normalize implementation effect of impairment criteria.In this paper, I explore the firms which make use of impairment policy on earnings management behavior, adopting the method of combining theoretical analysis and statistical analysis. In the first part, I analysis the overview significance of the selected topic, and elaborate the importance of asset impairment policies to curb earnings management. I also refer to many domestic and foreign scholars’ research results.In the second part, I analysis the relevant theory of asset impairment and surplus management, the development of asset impairment and confirmation, and the motives of earnings management. In the third part, I combined with a-share listed companies from2009to2011in Shanghai and Shenzhen, of the provision and return of impairment amount, I analysis our country’s current asset impairment policy implementation effect to enhance the paper’s powers of persuasion. In the fourth part, I analysis the impairment rules of accounting policy, and expound possible earnings management space in the new guidelines. Such as accounting policy of asset impairment criteria is not standard, the internal and external environment of a company is imperfect, and the accounting personnel quality is not high, and so on. In my opinion, inevitably there will be a surplus management behavior. In the fifth part, I put forward a series of suggestions and measures to reduce earnings management behavior, improving the implementation effect of asset impairment standards. These measures can be taken: to revise and improve impairment standard, and comprehensive information disclosure of asset impairment; to strengthen the internal control system, improve corporate governance structure; to develop and improve the asset trading market actively, establish and improve the market price of the system, strengthen the audit supervision, build a harmonious external mechanism; Strengthen the accounting personnel professional ethics education. In part6, I summarize the main ideas of this paper, and expound the existing deficiency, which needs further improvement and in-depth discussion.