Research On Influence Of Stock Option Incentive On Listed Companies' Earnings Management

With the development of modern companies,the separation of two rights cause some problems,for example,the principal-agent problems.Equity incentive makes managers have the opportunity to share the remaining property,prompting managers to work harder,effectively reducing the conflict of interest between shareholders.2006 "listed company equity incentive management approach(Trial)" promulgated,in the legal level,standardized the application of the equity incentive system,more and more enterprises introduced this system into the corporate governance mechanism.However,new problems emerge:due to the incompleteness of the contract management,it is possible for managers to manipulate accounting earnings by using the information of management,which will damage the interests of shareholders.In the development of the equity incentive plan,when the level is small,it may not work,while the level is too large,it may induce managers to manipulate earnings.In May 4,2016,the listed company equity incentive management approach was introduced,and was formally implemented in August13 th.China's equity incentive system started late,the effectiveness of the capital market is not enough,how to further improve the equity incentive plan to reduce earnings management,it is worth further study.The research background and significance are first introduced,the effectiveness of equity incentive from two aspects of the relationship and influence factors of equity incentive and earnings management,combing the research context of scholars at home and abroad,and then on the equity incentive and earnings management define the concept,elaborated the equity incentive in listed companies is expected to reach the aim,the principle of its operation and how to incentive target,incentive the way choice,analyzes the earnings management motivation,method and the measurement method.On this basis,using the principal-agent theory,incomplete contract theory,human capital theory,this paper put forward the hypothesis: whether the equity incentive earnings management behavior by management,whether the validity of equity incentive and incentive degree will affect the earnings management level,and whether the nature of the state-owned enterprises to a certain inhibitory effect on the relationship between the two plays.In the empirical part,selects the 2012-2015 bulletin between equity incentive plans of listed A shares as a sample,using the four models of these companies to measure the degree of earnings management,paired sample T test;and established a multiple linear regression model of the degree of equity incentive,equity and join in the model as a regulator ofnature variable,in order to prove that the company attributes of state-owned enterprises can weaken the incentive for the impact of earnings management,and to establish a valid for variables of the regression model is used to verify the validity of the two,to prove whether the length of the financial data of enterprises operation has some effect.By combining the earnings management of listed companies with the previous year announcement,test four variance distribution and T test showed that: the equity incentive plan announcement that the extent of earnings management as compared with the previous year increased,and this growth is significant.The first conclusion of this paper is that the equity incentive will induce the earnings management behavior.Through the multiple regression analysis,the paper draws second conclusions: the greater the degree of equity incentive,the shorter the validity period,the higher the possibility of earnings management.The state-owned enterprise is defined as 1,non state-owned enterprises is defined as 0,and cross ownership and incentive degree to join in the model,draw the third conclusion:compared with non state-owned enterprises,the state-owned enterprises have strict internal and external supervision mechanism,and executives of social responsibility and reputation,can weaken the earnings management caused by equity incentive.According to the results of empirical research,combined with the particularity of China's securities market and the status of the implementation of equity incentive,this paper puts forward some suggestions for improving the application of equity incentive.First,strengthen internal and external supervision mechanism and punishment mechanism to constrain the behavior of earnings management;second,to design a stricter and more reasonable equity incentive plan,reduce vulnerability;third,in order to limit the executives because of their own quality and other reasons of profit manipulation,should improve the occupation manager market,the establishment of credit archives.