The Influence Of Environmental Uncertainty On Earnings Management

Accounting information is an important link to maintain the normal and orderly operation of capital market.A large number of studies have shown that the management of listed companies can manipulate profits through making the choice of accounting policies for private interests,or carry out real activity earnings management for short-term interests.Such opportunistic earnings management behavior reduces the quality of accounting information,and seriously damages the interests of investors and the effectiveness of the capital market.Therefore,the incentives and governance means study of earnings management is significant.For the China,which is in the transition period,modern enterprises are facing many problems,such as the transformation of government functions,economic transformation and upgrading,environmental protection,and the deepening of globalization,the degree of diversification,these make the Chinese company facing the fluctuation and uncertainty of the external environment,that is,environmental uncertainty.Companies with high environmental uncertainty may be more frequent in earnings fluctuations and more likely to fail in strategy,therefore the manager will more likely to adopt opportunistic behavior.Can environmental uncertainty become an important external factor inducing earnings management? And as an important internal governance mechanism to alleviate information asymmetry and improve the quality of accounting information,internal control still plays its proper role in the management of earnings management,which is still worthy of discussion.Based on this,this paper based on the data of A-share listed from 2011 to 2015 as samples,study the impact of environmental uncertainty on earnings management(refine earnings management into accrued earnings management and real earnings management),and then further study the internal control in the relationship between environmental uncertainty and earnings management.Using the statistical analysis software such as STATA and EXCEL,the results are as follows: first,higher environmental uncertainty will induce accrual and real earnings management behavior of listed companies,and real earnings management is more sensitive to environmental uncertainty;second,enterprises with high internal control quality have lower accrued earnings management and real earnings management level,and accrued earnings management is more sensitive to internal control;third,good internal control has a significant inhibitory effect on the earnings management induced by environmental uncertainty.Fourth.Further studies have found that in the five elements of internal control,the internal environment,risk assessment,information and communication have significant governance effects on both earning management.Based on the above conclusions,we have the following enlightenment: facing the uncertainty of the environment,the enterprise should strengthen the internal control to deal with the possible risks;the external regulators should be more cautious and pay attention to the actual situation of its internal control construction;the investors should improve their own risk awareness and prevents the investment failure.