Empirical Research For The Earnings Management Behavior Of Manufacturing Listed Companies From Shanghai And Shenzhen A-share Markets Under The Perspective Of Asset Impairment

The behavior of listed companies in the capital market cannot and does not always maintain fairly, most of the time, in order to improve business performances or avoid punishments, in the case that the listed companies are unable to improve the present situation in a normal way, they hold fluky psychology that they can get the expected targets in stealth forms quickly, and then eventually set foot on the path of earnings management. Under the demands of their own interests, the listed companies will use a variety of means, in order to get rid of "trouble" finally, however, these means and ways all become integral parts of the earnings management of listed companies intentionally or unintentionally, asset impairment becomes one of the important paths is also expected, so the part of asset impairment in the accounting standard for business enterprises becomes a "target" without no doubt. Under the current policy of asset impairment, the rule which requires that any recognized impairment losses for long-term assets can not be reversed, will surely cause a large number of reaction in the listed companies and then prompt the listed companies to seek new alternatives.The intricate relationship between asset impairment and earnings management is not only studied by domestic scholars, but also favored by foreign scholars, it is the hot topic of theory and practice both at home and abroad. In recent years, many domestic scholars take how to test the changes of the listed companies’ behavior under the existing asset impairment criteria in a variety of methods as the focus of research, in order to evaluate the size of its ―power‖ directly, of course, there is also many literature doing study on its bright spot, to observe whether there exists a "correlation" in the behavior of long-term assets impairment of listed companies. However, for the related concepts of "structural change" and write-offs for asset impairment which are put forward in this paper are lack of the attention deserved, this may make the two areas of short-term assets impairment and long-term assets write-offs become another "new worlds" of listed companies.From chapter one to chapter four, this paper expounds the background, content and meaning of research, relevant achievements both at home and abroad are also covered, this part also analyzes the theoretical basis of the relevant concepts emphatically, gives out a detailed list of several main kinds of motivation which lead to earnings management and the paths of implementation at present, sums up the constraints and the huge space which still remains under the current standards for earnings management briefly and also do the pros and cons analysis according to the biggest difference under current standard—the reversals of long-term assets impairment are not allowed after being recognized, these all lay the solid theoretical foundation for the following empirical part. In the empirical part, this paper treats the motivation which leads to earnings management of the listed companies by using asset impairment method as a starting point. The earnings management motivation of the listed companies is divided into six categories after taking ROE for reference, at the same time, six matching explanatory variables are arranged to examine their effects on dependent variables– the provision ratio for short-term assets impairment(SWD) and the write-offs proportion of long-term assets impairment(LRES), then the results have showed that, the SWD of manufacturing listed companies is significantly related with four variables of loss prevent(FK), big bath(LOSS), loss(KS) and profit smooth(SMOOTH), LRES is significantly related with three earnings management motivation variables of FK, LOSS and SMOOTH, thus we can come to the conclusion that: Firstly, under the current standard, the reserve of asset impairment is still used by the listed companies, it is one of the means of earnings management that can not be ignored, and the performance from listed companies which have motivation of FK, LOSS and SMOOTH is most significant. Secondly, the objectivity and fairness of short-term assets impairment is likely to have been "eroded" after the implementation of current standard, the provision for short-term assets impairment plays a very important role in the camp of earnings management. There will be some adjustments on the structure and type of asset impairment reserve, this can be looked as a kind of opportunistic behavior which is attributed to regulation enterprises are forced by, this is largely due to the strict prohibit of long-term assets impairment reversal. The assumption of NO.1 from this paper gets support by data. Finally, it is proved that "substitution effect" exists in the write-offs behavior of long-term assets impairment, long-term assets impairment write-offs becomes a "rising star" as one of the means for listed companies’ earnings management, the assumption of NO.2 gets partly confirmed.This paper has theoretical and realistic significance in reminding not only report users to pay more attention to the listed companies’ behavior of short-term assets impairment and long-term assets write-offs but also accounting policy researchers to judge the implementation effect of current standard in a more comprehensive way.