Empirical Research On Fair Value And Earnings Management From The Internal Control Perspective

With the development of global economy,the economic communication and trades among nations are more and more frequent.Our economy is in the crucial period of market economy reform,and Accounting Standards for Business Enterprises have been in the period of reform as well.Under these backgrounds,we have largely introduced fair value measurements.Fair value measurements can make up some disadvantages of historical cost measurements,but because of the shortcomings of our market environment and specialty of our economy,fair value measurements in our country have a lot of problems.Among those problems,that enterprises make use of fair value measurements to manage earnings should be attained more attention.It is known that high equality of internal control can prevent earnings management,but the system of internal control in our country is not sound.Besides,we do not know whether internal control can prevent earnings management caused by using fair value measurements.This paper chose listed companies data in Shenzhen SE and Shanghai SE in China from year 2011 to 2014 as samples,and used empirical methods to analyze the 4296 samples to study what influence fair value impose on earnings management.Based on that,from the perspective of internal control,this paper divided all samples into two parts,and one is 747 samples with internal control deficiency,the other 3549 samples without that deficiency.By comparing,this paper studied that the usage of fair value measurements have impact on earnings management.The result is that there exists earnings management in our listed companies and that there are some differences between companies using fair value methods.Finally,to build up our internal control system,hinder earnings management,and decrease false accounting phenomena,this paper have proposed some suggestions to listed companies,accounting standards setters and market supervisors.