Influence Of Real Earnings Management On Listed Companies’ Performance

Listed company, as accounting information supplier, has strong incentives to manipulate earnings under the background of strengthen supervision of regulation department. Studies have found that companies has changed accrued earnings management to real earnings management to manipulate earnings. It prompt academics to re-examine the economic consequences of earnings management and strong regulatory policy effect of accounting information. Combined with existing literature, real earnings management owes to the same incentives as the accrued earnings management motivation. And it exits sales manipulation, expenses manipulation, production manipulation, which results in "positive effect" and "negative effect" to future performance. Based on the contract theory and signal theory analysis, there exits various real earnings management effects on future performance. Due to different motivations and means of real earnings management, it exits both promotion effect and reduction effect to future performance.Based on listed company data in Shanghai and Shenzhen stock exchange market, the paper examines the existence of real earnings management distinguished between different profit interval of listed companies, and then tests what influence it will have in future performance. In further study, it tries to illustrate what influence it will have on future performance if Chinese listed company use nonoperational income method to manage earnings. The results shows that there exists R&D, SGA, Production, sales on assets, sell expenses, financial expenses earnings management. R&D expense, sell expenses and aggregate real earnings management in tiny profit company contributing to positive effect on future performance. While, in little operational loss companies,those who doesn’t turn loss to profit through nonoperational income real earnings management perform better than those who turn loss to profit.This illustrates that earnings management in nonoperational income has negative effect on future performance.The paper provides evidence which real earnings management has various effects on future performance. Besides, it benefits to accounting information users and regulation department to consider comprehensive effect of earnings management. It is meaningful to investment decision and regulation.