The Research On The Relation Between Equity Incentives、earnings Management And Investor’s Expectations Of Listed Companies

As a long-term incentive scheme,equity incentive system is one of the important way tosolve the problem of entrust-agent,it is produced at the high-speed economic developmentstage in the economy developed countries (especially the America) and is widely usedeffective incentives. In2006, China issued and implemented “the management of the listedcompany equity incentive”,equity incentive system has been further improved. Because ofthe equity incentive to advocate the value creation as the guidance performance culture,established shared interests and constraint mechanism between shareholders and professionalmanagers team, but also may lead to the transfer of benefits, excessive incentives, incentivesmanipulation and surplus management, investor expectations bias other issues, so the equityincentive has been widespread China’s stock market listed companies and academic’sconcern.There is a huge space in the development of China’s equity incentive system,earnings management can increase the equity incentive object, especially the managers’private interests, and make the small shareholders, creditors, investors, regulators and otherstakeholders to affected the judgment of the operating performance of listed companies, to acertain extent, misled investors, gave investors a certain loss, affect the normal developmentof capital markets. So find the inherent law in the process of equity incentive, effectivelyrestrain earnings management, to reduce the deviation of investors’ expectation and otherproblems are needed to be done in the further research.This article first reviewed the relevant research literature about the theory of equityincentive, surplus management, investors’ expectation at home and abroad, on this basis,through analyzing the domestic and foreign listed company equity incentive and an empiricalstudy on earnings management’s correlation literature, surplus management and investors’expectation’s correlation of empirical research, and then puts forward the hypothesis of thisarticle；Then this article selects A shares in Shang Hai and Shen Zhen two city from2010to2012in the implementation of equity incentive schemes of the listed company as the researchobject, excluding the financial, insurance, ST, PT, data and the listed company equityincentive schemes’ information disclosure is not detailed, finally obtain A sample of171listedcompanies in the company, and then using the spss17.0software to multiple linear regressionmodel, analyze the the relationship among equity incentive, earnings management, investors’ expectations. The empirical results show that the implementation of equity incentive schemesof the management of listed companies in order to maximize their private interests, there areearnings management behavior, and decision-making misleading investors, making investors’expectation produce deviation, the greater the degree of earnings management, the greater thedeviation of investor’s expectations.Finally, based on the above research results, and combined with the current actualsituation in China, this paper put forward the way to improve our country’s listed companyequity incentive system and policy Suggestions on our country’s accounting standards system,establishing perfect financial forecast system, strengthen financial statements reporttimeliness, some suggestions on improving the laws and regulations constraint managersviolate the interests of the investors’ advice.