Research On Earnings Management Of Non-current Assets Impairment

Accounting standard for business enterprises promulgated since2007, great changes have taken place in the market environment in China. Changes here not only refer to the improvement of the institutional environment, but many new characteristics of the market economy itself is more important. Market economy itself is constantly changing but the institutional environment is relatively stable. So many new characteristics of current market economy in our country inevitably create a great impact on the accounting standards for enterprises in2007as a representative of the accounting environment.This paper mainly studies the effectiveness of our country’s current non-current assets impairment policy in inhibition of surplus management. The inhibitory effect of non-current assets impairment policy on earnings management in the implementation of the initial should be said to be obvious. But the current big environment promoted the birth of new means of earnings management. Represented by assets disposal of real earnings management is the new characteristics of earnings management. In this paper, the asset disposal and the use of non-current assets impairment to earnings management are both considered in order to verify whether the non-current assets impairment policy is also effective. The research’s conclusion depends on the current factors in all aspects of our country. The environment of our country is different from the west’s, so the foreign things may not appear in our country. Early prevention is always a must, in view of this, the paper puts forward some suggestions in order to achieve the purpose of further restrain earnings management. And the paper also finds that the non-current assets impairment policy itself exists many problems in the study, the problems here refer to that the non-current assets impairment policy itself has left a lot of space for earnings management. Thus improvement is very necessary to our country’s non-current asset impairment policy. Of course, the solution of any problem is not accomplished at one stroke, and the rectification of the environment is the ultimate solution. The framework of this article is divided into five parts, each part of the contents of the points above are as follows:The first part is the introduction. This part describes the research background and significance, and an overview of the research goal、content, research methods, ideas, and the innovation of the thesis.The second part is literature review. This part mainly elaborated the west and China’s research status of the use of asset impairment and asset disposal to earnings management, and has made a brief appraisal to both.The third part is the theoretical basis. This part firstly expounds the theory related to earnings management, including the definition of earnings management, motivation, means and basis theory. Secondly this part expounds the theory related to asset impairment, including the theory of asset impairment is able to produce interpretation, the status quo of our country’s non-current assets impairment policy. Finally, this part discusses the relationship between the earnings management and the non-current assets impairment policy. This relationship includes two aspects. They are the inhibition of non-current assets impairment policy corresponding to earnings management and encouragements.The fourth part is the empirical analysis. This part details the research hypothesis, selection of variables, the design of the research model and the selection of samples. Secondly, this part also details the empirical analysis on the four assumptions, the analysis of the empirical study results, etc.This paper argues that with the advent of asset disposal behavior, so the use of non-current assets impairment for earnings management is possible. This paper first verifies whether the asset disposal behavior as a means of earnings management exists. On this basis, the paper verifies the remaining three hypotheses, first using independent sample test and Wilkerson rank sum test to test whether the three hypotheses is set up, finally using regression analysis to verify whether samples studied exist the motivation of the use of non-current assets impairment policy for earnings management and the influence of asset disposal and other factors to non-current assets impairment. The fifth part expounds the conclusions, policy recommendations, and limitations of the study.