Evaluation Research On Earnings Quality Of Steel Industry Listed Company

Among the numerous accounting information, as one of the important basis ofreflecting enterprise operating performance, earnings closely relates to the variousenterprise stakeholders. The earnings quality of enterprise is most concerned for eachstakeholder.As is known to all, the iron and steel industry is the important basicindustry of national economy, and the development of iron and steel industry directlyaffects the development of relevant industries, such as defense, shipbuilding,construction, automotive and others. In recent years, China’s iron and steel industryshows the phenomenon of falling demand and overcapacity. Iron and steel industryhas come into the era of meager profit. The meager profit of iron and steel industrymakes stakeholders pay more attention to the quality of accounting earnings.Therefore, it is necessary to evaluate the earnings quality of the iron and steelindustry.On the basis of predecessors’ research results, based on the characteristics andinfluence factors of earnings, using factor analysis method, this paper build theearnings quality evaluation model of steel listed company, which makes uprespectively from financial indicators and non-financial indicators. Based on2010,2011and2012annual report data as sample, the evaluation model of earnings qualityis used to analysis the earnings quality situation of the whole the iron and steelindustry and iron enterprise. Evaluation results show that the financial indicators andnon-financial indicators can affect the earnings quality of steel enterprise, and thedegree of financial indicators is stronger than non-financial indicators. The earningsquality of steel listed company has low level, small fluctuation, big individualdifferences. According to the evaluation results, this paper gave the suggestions ofimproving the earnings quality of the iron and steel industry: iron and steel enterprisescan improve the earnings quality of the iron and steel industry and enhance thesustainable development of the iron and steel industry only by optimizing theindustrial structure, improving product quality, focusing on independent innovation,strengthening the upstream and downstream industries docking.