The Effects Of Real Earnings Management On Costs Stickiness

Cost stickiness is the asymmetric variation in the increase or decrease of enterprise cost and business volume.When business volume increase or decrease,the cost of the enterprise will increase or decrease,but the increased business volume is more than the cost reduction.It is different from the traditional cost model in management accounting that reveals the linear relationship between cost and sales.Since 2003,the American scholar ABJ put forward the concept of STICKINESS,domestic and foreign scholars focused on the theory of cost,a large number of empirical studies proved the existence of the stickiness.And then,scholars studied deeply in the intention of cost stickiness.Although opinions were different,the conclusion in manager's self-interest,manager expected and agency problems are the approximately same.So,the earnings management has important effects on the cost stickiness.However,earnings management behavior made the information spurious and affected the interests of stakeholders.Due to the improvement of the relevant legal system and supervision,companies probably carry out real earnings management behavior instead of accrued earnings management behavior.But real earnings management is not easy to take the attention of regulators,which has the great harm to stakeholders and the capital market.In addition,the agent theory is the important reason of earnings management,and the corporate governance structure is a kind of coordination for agent relationships,and perfect corporate governance structure can decrease the earnings management behavior.Based on these,this paper discusses the relationship between real earnings management and cost stickiness from the corporate governance perspective,then studied the relationship in different corporate governance structure.This paper choose the A-share listed company in stock markets of Shanghai and Shenzhen from 2011-2015.It found out the existence of cost stickiness empirically,and the relationship between real earnings management and its specific ways and cost stickiness,and then studied the relationship in different corporate governance structure.The result shows that it exist the cost stickiness in listed company in China,and different industries companies have different cost stickiness level.For achieving earnings targets,managers may take real earnings management behavior to manipulate earnings,which will lead to the significant reduction of cost stickiness.Besides,three different ways of real earnings management behavior have different effect on cost stickiness.With the enhancing of corporate governance level,real earnings management behavior can be controlled.In different corporate governance level,real earnings management affects cost stickiness differently.The companies with big company size,many independent directors and rights separation have fewer real earnings management,thus improve the company's cost stickiness.However,it was not founded the significantly relationship between real earnings management and cost stickiness in different manager proportion of shareholding.Finally,the robustness test proves the empirical research conclusion,and puts forward related suggestions.