Research On Listed Companies’earnings Management With Extraordinary Items

The security market has achieved certain goals in terms of scale,legislation and professionalism in the past 20 years.In addition,the majority of investors tend to become increasingly rational,investors put more weight on value when it comes to decision making.Accounting earning is a vital index in analyzing the value of firms,thus drawing the concern of most investors.Inevitably,many listed companies have tried every possible ways in manipulating the amount of accounting earning to meet their prospected purposes.Usually,investors are less likely to analyze the financial statements by using the accounting earning.They,normally,pay more attention to the figure of profit and loss.Technically,it’s not too hard to manipulate the non-recurring profit and loss figure,making it a widely common tactic for the listed company to whitewash their financial statements.The regulation by China Security Committee on this issue has been continuously improved;meanwhile,investors are having a better and better understanding of the non-recurring profit and loss.Both literature review and empirical study will be used in this dissertation.In the literature review,firstly,ideas and thoughts from other scholars on this topic will be presented.Secondly,theories regarding to the non-recurring profit and loss will be explained and listed.Thirdly,regulations on this issue will be discussed and comparisons will be drawn against other nations.Fourthly,focus will be placed on the motivations and methods adopted by listed firms regarding to earning management.In empirical study,all the eligible listed firms will be selected as the sample for the regression analysis later on.The timeline is 3 years scale,raging from 2008 towards 2010.Last but not the least;conclusion,evaluation and suggestion will be discussed in the third part of the dissertation.