Research On The Governance Path Of Media Attention To Enterprise Earnings Management

With the increasingly fierce competition of capital market,earnings management exists in every Company.Earnings management is a result of profit manipulation which is committed by managers who want to reach the managing goals,,to get plenty of funds and to meet their own interests.Earnings management is the origin cause of the distortion of accounting information and the wrong decisions made by stakeholders.Excessive earnings management will lead to turbulence of capital market.For this purpose,the shareholders using internal control system and the compensation incentive plan to supervise and restrain the managers,which encourages them to maximize benefits for enterprises.Because there is not always effective internal governance mechanism,the researches of law and finance provide a new idea to government earnings management.At the present,China’s lack of a highly developed capital market to ensure the effective function of the law,and a legal environment is also needed.But the above research has inspired people gradually transform their view point of governance from the internal aspect to external aspect.Media attention gradually come to the public’s view.The development of science and technology makes the media more and more involved in people’s lives.The media conveys instructions and leads public opinion through collecting,processing and publishing information.First of all,media attention will improve the transparency of information,which brings good news to those who rely on the company’s financial information to make contract.As the phenomenon of asymmetric information,it’s difficult for them to handle the true financial information.The media attention helps them retard the lagging and false information.Secondly,negative media will damage the reputation.With the exposure of managers,irregularities,managers’ will actively correct the error and reduce the level of earnings management in order to reduce the harm of reputation.Finally,the media attention can cause stakeholders alert.In order to avoid the high risk of fundraising,the investigation of administrative agencies and inadequate financing of financing fell,manipulation of earnings management will be effectively curbed.Studies have confirmed that the media has a governance role on earnings management.The paper will explore the path of governance on the basis of them.After the study on the 2012-2014 motherboard Shenzhen A shares of the listing Corporation,we found that media attention affects earnings management level through the financial path,reputation mechanism,administrative intervention path and the market pressure path.Except the market pressure path,other mechanisms have all been confirmed,which expands the research field on earnings management,and provides a new idea for earnings management’s government at the same time,...