Can OCI Disclosure Curb Earnings Management In Public Companies?

With the separation of modern enterprise ownership and management rights,under the guidance of the accounting objective of the fiduciary responsibility view,the historical cost measurement attributes and the income expense view have been formed.After that,as the securities market expands,the need for external investors to make information on financial reports is increasing.The financial reporting target has a useful view of decision—making.With the extensive use of fair value measurement attributes,based on the historical cost measurement attributes,the concept of revenue costs is adopted.The practice of recognizing accounting income cannot fully reflect the changes in corporate net assets.Therefore,the concept of assets and liabilities is needed to fully reflect changes in corporate net assets and overall corporate returns.The International Accounting Standards Board(IASB)formally introduced the concept of "comprehensive income" in the "IAS No.1—Presentation of Financial Statements" issued in 2007.The 2007 China Accounting Standards and International Financial Reporting Standards(IFRS)are essential.After convergence,the concept of "comprehensive income" was also introduced.From the point of income measurement,the concept of"comprehensive income" reflects that the international and domestic accounting standards have shifted from the previous view of income and expenses to the integration of the concept of assets and liabilities and income and expenditure.Although the "Enterprise Accounting Standards" system implemented in 2007 introduced the concept of other comprehensive income and comprehensive income,it did not formally increase the presentation of other comprehensive income items.It is only clear in the basic criteria that the benefits are directly included in the owner's equity.The loss is other comprehensive income.From 2009,the Ministry of Finance requires listed companies to list other comprehensive income.The above changes in other comprehensive income accounting standards provide a good window for us to observe its economic consequences.In 2007,accounting standards,other comprehensive income only disclosed unlisted.In the three major financial statements,other comprehensive income is reflected in the capital reserve report in the balance sheet.The original intention of disclosure of other comprehensive income is to improve the usefulness of accounting information,but the presentation of financial statements has brought about the problem of opaque information.This creates an opportunity for management to perform earnings management and even profit manipulation.The accounting standards in 2009 require disclosure of other comprehensive income.Then,does disclosure of other comprehensive income disclose that it can curb earnings management?If it can curb earnings management,how does it reduce management's earnings management motivation and behavior?This requires us to explore and analyze.On the whole,this paper takes the change of accounting rules of other comprehensive income as the entry point,and studies the impact of other comprehensive income disclosures on earnings management around the economic consequences of other comprehensive income as the incremental information of accounting surplus.Specifically,this article takes the 2007—2016 listed companies in Shanghai and Shenzhen as research objects.The research is divided into three steps.First,using a two-way fixed effect DID model to verify whether the implementation of other comprehensive income disclosure policies has inhibited the company's earnings.Management;Secondly,using the multiple linear regression model to verify how other comprehensive income disclosures reduce management incentives and behaviors of earnings management;Finally,considering the endogenous problems of other comprehensive income and earnings management due to self-selection,we use the Heckman two—stage model to identify Excluding this part of the endogenous effects,the empirical results robustly support the conclusion that disclosure of other comprehensive income disclosures can curb earnings management.The study in this paper supplements the literature on how to integrate income and expense concepts and asset concepts,and provides empirical evidence to support the issuance of other comprehensive income related standards.It provides support and reference for policy makers to evaluate the international convergence of corporate accounting standards,and also provides investment advice.How to achieve decision—making in the capital market.In addition,under the reform and opening up of the new era,the conclusions of this paper provide references and references for how to achieve the further international convergence of accounting standards.