Research On The Effect Of Stock Owenership Incentive On Earning Management

Equity incentive as an important part of modern corporate governance theory provides a very good settlement of listed company owners and management between the way to solve the contradiction, since the equity incentive appeared by domestic and foreign listed companies is widely used, but also deeply researched and tested by domestic and foreign scholars. In 2006, "listing Corporation equity incentive management approach(Trial)" promulgated, which provides an opportunity for the development of China’s equity incentive system. Along with the increasing development of equity incentive system and mature, more and more listed companies launched equity incentive plan, equity incentive system has been rapid development, but the consequent equity incentive the evils are gradually emerging. This fully shows that the listed companies in our country in the aspect of the implementation of equity incentive still have many problems, such as management earnings or strengthened. This paper makes an empirical test from two aspects of the influence of stock incentive intensity on the degree of earnings management and the change of earnings management degree before and after the stock ownership incentive, and explores the relationship between stock incentive and earnings management.Firstly, through combing the domestic and foreign about equity incentives and earnings management research we found that there are still some deficiencies in previous research. by combing the relevant theories and concepts of the equity incentives and earnings management. On the basis of theory research, by way of game model formula has been the fundamental basis for the hypothesis, the link of the equity incentives and earnings management, the equity incentive and earnings management constitute factors constitute the explanatory variables in this paper.Secondly, from two aspects of the influence of stock incentive intensity on the degree of earnings management and the change of earnings management degree before and after the stock ownership incentive, the empirical test is carried out. The two studies were constructed regression model, and through the sample to examine the regression model, the study found that: between equity incentive intensity and the degree of earnings management exists positive correlation, the changes in the intensity of stock ownership incentive can significantly affect the degree of earnings management of large and small; the study also found that the equity incentive and earnings management have different levels, including equity incentive of earnings management degree is higher than that of equity incentive before; as the explanatory variables of many factors of changes in equity incentive and also illustrates the difference between equity incentive and the extent of earnings management.Finally, this paper draws some conclusions based on the empirical research results, through the further analysis of the conclusions of the study, we get the inspiration of this research, and gives reasonable suggestions based on the revelation. In practice, it is helpful to the design of the equity incentive plan and reduce the generation of earnings management, which is conducive to the healthy and orderly development of the economy.