An Analysis Of CSR Information Disclosure’s Impact On Real Activities Manipulation

Earnings management has become one of the research focuses in accounting academic circles in recent decades. From a global perspective, earnings management has become a worldwide problem. Earnings management includes accrual manipulation and real activities manipulation. However, with the revision of accounting standards and the strengthening of regulatory agencies’supervision, the risk of accrual manipulation has increased and the manipulation space has been compressed continuously. Then real activities manipulation has become a trend of managers’earnings management. Real activities manipulation distorts the normal production and business activities to achieve short-term earnings targets. It changes the whole earnings level and cash flow level as well as the distribution of earnings among different accounting period. This will bring more serious damages to the future benefits and long-term value of the enterprise. Thus, it is more urgent to find an effective way to constrain real activities manipulation.Earnings management is caused by asymmetric information. The separation of ownership and management right is a major characteristic of modern enterprises. However, the different goals between managers and owners make managers obtain private interests by manipulating earnings under the background of information asymmetry. In addition, the interests of large shareholders are not completely consistent with the interests of the small shareholders. The large shareholders have strong incentives for earnings manipulation in order to strengthen their control power. As the management’s appointment, to a large extent, is subject to the impact of large shareholders, the managers’earnings manipulation reflects the will of the lager shareholder. Hence, whether the managers’earnings management is for their own personal privates or just under the pressure of large shareholders, it is the existence of information asymmetry that makes it possible. Therefore, increasing information transparency and reducing information asymmetry are effective methods to constrain earnings management. The disclosure of social responsibility information is one of the methods.Today, the concept of sustainable development has been popular supported and the corporate social responsibility has become a hot topic and lots of academicians begun to study it. The existing literature shows that the studies of the relationship between corporate social responsibility and earnings management almost focus on the accruals earnings management rather than real activities manipulation. Besides, the studies of the above-mentioned relationship are major based on the perspective of fulfillment rather than information disclosure. Yet throughout China, with the strong promotion of national government, capital markets and industry associations, the social responsibility report, a new management philosophy as well as a new management practice which related to corporate governance, society and environment, is being rapidly implemented and developed. All these make it possible that we study the social responsibility information disclosure problems from a more intuitive perspective of social responsibility report. Therefore, this paper discusses the influence of corporate social responsibility on real activities manipulation on the basis of existing research results.There are total five parts in the paper:The first part, which is called introduction, briefly introduces the research background and significance that includes theoretical consequences and practical value. In addition, this part has summarized the research ideas and research methods and also described the possible innovations and shortcomings of this paper.The second part is literature review. This section mainly sorts out domestic and foreign scholars’research on social responsibility theory, real activity earnings management theory and the relationship between them. In terms of social responsibility theory, this paper mainly reviews the related concept of social responsibility, the measurement of social responsibility information quality, the disclosure motivation of social responsibility and the consequence of social responsibility information disclosure. In terms of real activity earnings management theory, this paper briefly reviews four parts:definition, measurement method, motivation and economic consequences. At the end of this section, this paper has made a simple commentary of the existing literature.The third part is theoretical analysis and research hypothesis. In this section, this paper has analyzed the relationship between social responsibility and real activity earnings management, the effect of released willingness of social responsibility report on the relationship and the impact of ownership concentration on the relationship. Then we put forward hypotheses of this article.The fourth part is research design. This section includes data and sample selection, measurement variables, regression models and empirical analysis. To test the validity of hypotheses, this paper has borrowed domestic and foreign scholars’ research results about real earnings management empirical model and measurable indicators of real earnings management activities. Then this paper has set four regression models from the perspective of social responsibility report’s disclosure, social responsibility report’s score, social responsibility report’s released willing and ownership concentration respectively. We use STATA11.0 statistical software for data analysis, and finally we use a robust test to verify the results of the empirical part.The last part is about research findings and policy recommendations. On the basis of empirical results, this part presents research conclusions. At the same time this part gives several relevant policy recommendations.