The Research Of Corporate Earnings Management Based On Tax Burden

In this paper, we studied the relationship between tax burden and the choice of company’s earnings management structure and earnings management means. Based on the theory of self-serving behavior and opportunistic behavior and the goal of profit maximizing, companies have the motivation of reducing tax costs during their earnings management. From the tax point of view, this paper analyzed the different tax cost of different profit form in income statement. According to the level of tax burden, the income statement items were divided into three categories. They are non taxable items, taxable items i and taxable items ii.Because different profit items have different tax costs, in order to achieve earning targets with lowest tax burden, companies which have earnings management motivations will compare the cost between different profit items. This paper analyzed the tax burden of different profit items, and on this basis, analyzed the choice of company’s earnings management structure and earnings management means.This paper is divided into four parts. The first part introduces the whole topic of this article, which include the background, meaning, research methods, and reviewed the literature research results at home and abroad, and put forward the innovation points and deficiencies of this paper.The second part expounds the relevant theory, and on this base, analyzed the relationship between tax burden and earnings management. This part mainly analyzed the burden of income tax, value-added tax and the business tax, and on this base, divided the profit items and earnings management means into three categories.The third part analyzed the relationship between the tax burden of the income tax, the value-added tax and the business tax and the management of earnings based on the theoretical analysis.The fourth part is empirical part based on the study design and the collected data.The paper analyzed three test results and put forward four policy suggestions at last according to the empirical research.