The Empirical Study About Equity Incentive To Earnings Management

Equity incentive after is the benefit maximization goal of managers and owners interest maximization together.Implementation of equity incentive can choose to become investors. Managers’pay is affected by stock price.managers wanting a rich reward will make good business performance.Equity incentive has certain positive role to promote value,but also brought some disadvantages,when managers want to get high pay,business performance is not good enough,Managers may struggle to improve company’s performance,inevitably by earnings management activities.Accrued earnings management manipulats accrued profits to improve performance;real earnings management manipulats operating cash flows.The former is easy,more likely to be used by managers,along with the continuous improvement of the accounting rules, managers tend to use real earnings management,because they are more subtle.Both means strengths deserves attention.Based on our country from 2009 to 2013 in 664 equity incentive plan of the implementation as the research object,the empirical analysis to investigate the validity of the equity incentive,of the proportion of the total equity,the subject matter and accrued,the relationship between the real earnings management level.The study found that the longer the validity,the lower the level. Validity of equity incentive and the company accrued earnings management level is significantly negative correlation;Of issue at that time, the greater the proportion of the total equity, the higher managers’ earnings management level.Of the proportion of the total equity significantly positive correlation with the company’s real earnings management level.Stock appreciation rights and is related to the level of earnings management and stock options associated with earnings management level, restricted stock and the correlation of earnings management level is uncertain.