A Study On The Conditions Of Classification Shifting In Chinese A-Share Listed Companies

At present,China is entering the "new normal" economy.The market economy is in the period of transformation which depends on the development and perfection of the capital market.Information disclosure is particularly important for investors and the development of the whole market economy.Therefore,the study of non-recurring items and earnings management is very necessary.Based on the previous researches,this paper focuses on the using conditions of classification shifting earnings management.From a unique perspective,this paper does the researches from the trading off among three earnings manipulating methods:real earnings management,accruals earnings management and classification shifting earnings management in theoretical analysis and empirical analysis.Since the classification shifting is a way of manipulating earnings in the income statement by intentionally misclassifying the items,it is difficult to be perceived and the using cost of classification shifting is relatively low,however,it is closely related to the other two ways of earnings management,so I regard the relations among three earnings management as the point of penetration to study the using conditionals of classification shifting.In the part of theoretical analysis,it is been studied and tested based on the previous literature review,which has found the previous study space for theoretical derivation and proposing a series of relevant assumptions.In the part of empirical analysis,I used the data from 2008 to 2013 in China A-share listed companies and using the logit model to analyzing the conditionals from real earnings management and accruals earnings management,which can research the using conditions of classification shifting phenomenon in Chinese companies in the capital market.From the micro-level study,when the financial position of the enterprise is poor,the proportion of institutional ownership is high,the market position is low,the firm is audited by "Big 4"and the forecasted cash flow is available,the real earnings management and accruals earnings management are limited,and the enterprise managers will turn to using the classification shifting earnings management.From the meso-level study,when the managers can't obtain the desired objectives of the operation by manipulating real activities and accruals earnings management,the managers will turn to using the classification shifting as an alternative to meet the analyst forecasts expectations or smooth the enterprise profits.Through a series of studies,they show that the management manipulating in classification shifting earnings management of A-share listed companies in our country does exist,and when the other two kinds of earnings management methods in some conditionals are constrained,managers may use classification shifting to manage earnings more and more.Therefore,I have given many suggestions in reality to the policy makers,audit analysts and business managers to let more people can identify the classification shifting,which allowing investors to optimize investment strategies and make the whole capital market resource allocation effectively.And if the investors and whole capital market can promote the investment efficiency,the socialist market economy may be improving and mature.