Real Earnings Management Research Of Water Transportation Industry In China

Real earnings management is a behavior that can control or adjust the accounting information in the external financial statements through real business activities and influence the stakeholders’ decision-making and realize the interests of enterprises and managers.Compared with accrued earnings management,the process of obtaining benefits of real earnings management has a certain degree of concealment and is not easy to be identified and its negative effects are greater.But as the economic and social environment of enterprises,especially the accounting environment,changes,such as the Sarbanes-Oxley Act and the promulgation of China’s new corporate accounting standards,directly affect the earnings management behavior of enterprises.In the new accounting environment,the space of accrued earnings management is limited and more and more enterprises tend to choose real earnings management.So the real earnings management has gradually become a hotspot of theoretical research.Real earnings management is more complex than accrual earnings management and it is difficult to judge its existence and management degree simply and quantitatively.So the case study method is more applicable.On the basis of the theories of self-interest economy,information asymmetry and incomplete contract and combined the literature research method and case study method,this paper which uses the empirical identification analyzes that the real earnings management of the water transport industry is prevailing and points out the negative effects of real earnings management.And this paper selects the representative company of the water transport industry-China COSCO as the case study company,and analyzes the IPO of China COSCO,its huge losses and turnaround and other large events from the aspects of motivations,means of choice and economic consequences.At the end of this paper,from the aspects of accounting standards,supervision systems and corporate governance some suggestions are put forward for the water transport enterprises represented by China COSCO in order to deal with the negative effects of real earnings management.