Study On Earnings Management Of The Listed Companies Based On The Impairment Of Intangible Assets

With the rapid development of social economy and science and technology constantly updated, companies’ uncertainty and risk increases, and the profitability stability of the assets of enterprises have also been faced with the huge test. Thus, the earnings management gradually became the focus of accounting theory and practice. Asset impairment has become a common means of earnings management used by the listing corporations; this kind of phenomenon caused more and more stakeholders concerns. In order to prevent some listing corporations use long-term assets impairment including the intangible assets impairment to achieve the purpose of operating earnings, On February 15, 2006, The Ministry of Finance promulgated the” Enterprise Accounting Standards No. 8-- impairment of assets”, the Accounting standards stipulate that once long-term asset impairment loss is determined, in the later accounting period it shall not turn back. The standards being promulgated mainly prevent some listed Corporation using long-term assets impairment includes impairment of intangible assets to conduct earnings management.This amendment makes enterprises cannot change surplus by reducing accounting base and changing the proportion of the profit ratio provision. In the disclosure of information, the Standards also make a new specification. The listing corporations also did some degree of adjustment to change some accounting treatment behavior about assets impairment’s extracting and reversing. Whether we can achieve the expected effect that this adjustment policy makers want, the new guidelines in the intangible asset impairment can curb the relevant provisions of the listed company in earnings management, improve the quality of accounting information, is just what this thesis is about.First, conclude the research approach from summarizing and inducting the domestic and foreign research literature; On the basis of the previous scholars’ research achievements, state the theory about impairment of intangible assets and earnings management, and the internal relations between them; Then deduce the research hypothesis, design the empirical model and variables, select financial industry listed companies in Shanghai stock market and Shenzhen stock market, set the research period as the year from 2010 to 2013; Use the improved extended Jones model to measure the level of earnings and establish multivariate linear model about intangible assets impairment and the level of earnings management; Use SPSS20.0 statistical software to descriptive statistically analyze and empirically test the sample; Finally, conclude research findings based on the foregoing theories and the empirical research results, and offer suggestions for the listed companies in financial industry, regulators, and investors.The model analysis shows: there is a positive relationship between the intangible assets impairment and the earnings management; in the current asset impairment system, there is still a considerable part of the listed corporations use intangible assets impairment to earnings management. Low profit companies using impairment of intangible assets to avoid loss of profits is not significant, but highly profitable companies using impairment of intangible assets to smooth profit is significant, the model results show significant positive correlation. According to the research conclusion, the paper puts forward related suggestions about the impairment of intangible assets of listing corporations’ disclosure and supervision and so on.