Earnings Management Tendency In SEO

With the rapid development of China's securities market,the scale of seasoned equity offering(SEO)is getting larger.SEO has gradually becomean important means for enterprises to obtain funds in China.In order to guarantee the capital market financing function,and protect the interests of the broad masses of investors,maintain the market order,China's securities regulator strictly limit the listed companies equity refinancing qualifications and conditions,which to some extent this specification the equity refinancing behavior of listed companies,but in order to achieve the refinancing conditions,raise the issue of stock price,during the period of equity refinancing of listed companies have motivation for the earnings management.In 2006,the securities regulatory commission issued the measures for the administration of the issuance of listed companies,on the basis of the original securities laws further tightening,in 2007 after the implementation of new accounting standards in our country,the practice of absorbing the international accounting standards,compressed the accrued items the manipulation of earnings management space.Index of listed company,therefore,in order to cater to the new policy for starting a new round of earnings management,when there is greater scrutiny of accounting practice,the actual manipulation of real earnings management is more likely to happen.In this paper,on the basis of analyzing the domestic and foreign literature review,from the basic theory,this paper analyzes the definition,means,the economic consequences of earnings management and related theory,and the earnings management behavior when the equity refinancing.Then,based on the theoretical analysis,the paper puts forward assumptions about the performance of the company's earnings management in the process of equity refinancing.In model building section,build the real surplus management,accrued items,earnings management,corporate performance model and the final inspection model,this paper will sample data is divided into eight categories,respectively,the characteristics of the test samples of each group company.The empirical part,the paper equity refinancing in 2008-2013 Shanghai and shenzhen A shares of the listed companies as research samples,the equity refinancing may be accrued items when earnings management and real earnings management surplus has carried on the empirical research.The research results show that real earnings management activities driven by earnings management and the performance of the stock market after equity refinancing has poor consistency and predictability,especially spending on research and development,sales cost and reduce the cost of management.Therefore,when the listed companies actively inflate the surplus through more opaque and stronger real earnings management channels,the value of the equity refinancing point is more likely to be overvalued.This paper finds that although the cost of real earnings management is higher,the listed companies are still more inclined to use real earnings management when equity refinancing.