An Empirical Study On Earnings Management Of The Listed Companies’ Executive Reduction

In order to solve the principal-agent problem caused by the separation of the two rights in the modern enterprise system, the equity incentive system emerged. In recent years, it is often seen the phenomenon of executives reductions of Listed Company. Reasonable executive reduction behavior itself, optimize the company’s ownership structure, improve governance system; but the company’s managers have a lot of internal information, possessing greater interest motivation. They are very special reduction subjects.Under the environment of the investor legal protection in our country, the market supervision lagging behind, managers use earnings management manipulation to twist corporate performance, taking advantage of improper reduction to obtain higher yielding behavior, interfering with the capital market information fair disclosure, damaging the interests of small investors. At present, China’s economy is in the three phase of the superposition of a specific stage, under this background, there is a certain difference in the development of the industries of the Listed Company. Research shows that the macro and industrial policies and factors have great influence to listed companies. As a direct indicator of the running status of the industry, the difference of the industry boom will lead to the difference of the management level of the Listed Company.In the part of concept definition and theoretical analysis, the dissertation focused on the analysis of related hypotheses. Next, using non-parametric test, descriptive analysis and multiple linear regression, selecting A shares on the main board listed company executives reduction as empirical samples, from the angle of accrual earnings management and real earnings management, based on the perspective of industry boom, have the empirical study of executives reduction and earnings management.The empirical results show that under the condition of different industry boom, there was a significant difference between the reduction and earnings management behavior; When managers from different industries face the same level of prosperity, there is an industry characteristics in the process of reduction and earnings management behavior. Finally, relevant policies recommendations are put forward based on the conclusions of the study.The innovations of this dissertation includes: Based on the perspective of industry. Secondly, the method of using DRC industry prosperity index to get the industry boom level is the innovation of research method. Thirdly, measuring earnings management on quarterly data. There are some limitations of this dissertation: In the process to determine the level of the industries and reduction data collection, the data is not in enough depth. Industry classifications are constructed only at the level of industry categories, there is no further refinement of the industry classification.