Excessive Earnings Management Of Listed Companies

Now, Chinese capital market is in the stage of reform and development and hasn’t formed a real fair and effective market environment. The regulation is not in place. Enterprise management is based on specific motives, making use of excessive earnings management to adjust report surplus to maximize their own interests. Many companies’ earnings management behavior is more and more far away from its original positive effect and even damages the interests of investors. In 1990’s, China’s listing corporations’ accounting problems of false information continuously are exposed, and some listing corporations are punished by the CSRC because of false reports or false accounting information.This may be only the tip of a small proportion of accounting fraud, but enough to explain the universality of earnings management in operating and management.Capital market motivation, contract motivation and anti-supervision motivation are the main motivation of surplus management. According to the different motives, the enterprise managers will take different earnings management measures to meet their expectations. Excessive earnings management may lead to adverse consequences and influence. On the basis of previous research, this paper introduces a typical case-GMCC, discussing its excessive earnings management behavior. Hope that it can reduce the excessive earnings management in China.This paper includes six chapters. The first chapter introduces the research background, research significance, review of the literature, train of thought and research methods. The second chapter reviews the theory of earnings management, including the basic concept of earnings management, the motives and means of earnings manipulation and then introduces the phenomenon of excessive earnings management including the principles, means and basis of recognition. The third chapter introduces the basic situation of GMCC, the causes of choosing GMCC and general situation of its excessive earnings management then analyze its motivation. The fourth chapter mainly analyzes GMCC’s two types of earnings manipulation. The fifth chapter analyzes consequences and influence that excessive earnings management has lead GMCC to. The sixth chapter first gives the suggestion of reducing excessive earnings management and the put forward the research conclusion and expectation.