Empirical Study On The Choice Of Two Types Of Earnings Management Behaviors In IPO Companies

Earnings management is an old and lively subject in practice and theory field.Based on the rational economic man hypothesis,the management will use the accounting flexibility to adjust the profit to maximize its own interests within the scope allowed by the accounting standards.The company has the motive in the IPO process to increase the IPO price through the means of earnings management.The means of earnings management include the manipulation of accrual items and the manipulation of real activities,namely accrual earnings management and real earnings management.Domestic and foreign scholars have more comprehensive research on the accrual earnings management.The systematic study of the real earnings management has just started,especially that of IPO companies,which shows that it is still necessary to scientifically and deeply study the behavior choice of the accrual earnings management and the real earnings management under different internal and external conditions.After focusing on the institutional background of China's capital market and researching relevant literature at home and abroad,this paper selects the financial data of the IPO companies for the first three years before the IPO process.This paper studies the impact of the choice of the earnings management methods of the IPO companies and the impact of two kinds of earnings management methods on IPO pricing under different internal external conditions based on the impact of the choice of the earnings management methods of the IPO companies and the impact of two kinds of earnings management methods on IPO pricing and related theories.The results of this paper show that the IPO companies have implemented both accrual earnings management and real earnings management in order to increase the IPO price.This paper finds that the good reputation brokers prefer the real earnings management and the non-excellent reputation brokers prefer both the accrual earnings management and the the real earnings management to increase the IPO price.This paper shows that IPO companies with high agency costs prefer the accrual earnings management and the IPO companies with low agency costs prefer the real earnings management to increase the IPO price.This paper demonstrates that IPO companies with high earnings management flexibility prefer the accrual earnings management and the IPO companies with low earnings management flexibility prefer the real earnings management to increase the IPO price.