An Empirical Study On Earnings Management Of Non - Monetary Asset Exchange Of Listed Companies

In1999, the Ministry of Finance issued the Standard of Non-monetary Transaction in China for the first time. Moreover, in order to optimize this Standard and make it more compatible with the international, there were two amendments respectively in2001and2006. The two amendments to this Standard have been proven to have a significant impact upon the relative managing work within a company. It not only becomes an invisible restriction upon the transaction, but also provides a company with a feasible alternative for the earning management. Therefore, this Standard is an important window into the relative accounting work with respect to non-monetary asset transaction.First of all, this essay has presented a brief introduction to the research background. Meanwhile, the significance of this thesis has also been illustrated. Furthermore, the author has specifically assigned definitions to certain important notions. For example, this essay has clearly explained the nature and concept of Non-monetary Transaction and Earnings Management. With reference to certain related data home and abroad, this essay has chosen companies listed in Shanghai Stock Market and Shenzhen Stock Market as the research sample. Having proposed certain feasible assumptions and determined related research standards, concrete research and reference samples have been finally determined. By taking a close look at those companies’daily applications concerning their financial managements, a research into the obedience to the Standard of Non-monetary Transaction has been conducted. Through careful research, it can be concluded that in2013, the majority of companies listed in stock market, which have conducted non-monetary transactions, have employed the Standard as a powerful tool in their earning managements. A useful clue judging whether a company has obeyed the Standard is the performance of its debt, annual salary system and net profits. Based upon the analysis above, we have put forward certain viable suggestions for improvement in the related accounting work with respect to a company’s conduct in non-monetary transaction.