Study On The Relationship Between Performance Pressure And Earnings Management Of The Listed Companies

With the development of science and technology,market competition is becoming increasingly fierce.Faced with performance requirements from all kinds of stakeholders,companies have increasing performance pressures.On one hand,high performance pressures may lead to high business efficiency and high corporate performance.On the other hand,excessive performance pressure may force companies to achieve earnings targets through a fake approach-earnings management.At present,the relationship between performance pressure and earnings management has not yet formed systematic research results,in order to explore the relationship between performance pressure and earnings management,this paper selects the sample of China A-share listed companies from 2010 to 2016,theoretically explores and examines the relationship between performance pressure and earnings management through data analysis and case analysis,and explores the tendency of earnings management choices under different performance pressures through comparative analysis.This study found,1)there is a significant positive correlation between corporate performance pressure and earnings management.The larger deviation from targets,the stronger incentives for earnings management companies will have.Companies with unfinished targets,who have positive performance pressure,tend to use positive earnings management,such as increasing profits,to manipulate in:flated performance levels.Companies that have negative performance pressures for over-achieving goals may use negative profit management practices,such as profit reduction,to hide performance results due to ratcheting considerations.2)Compared with capital market pressures and historical growth pressures,the performance pressure of internal target completion has more significant relationship with earnings management.3)Faced with different performance pressures,companies will adopt different earnings management operations:when faced with performance pressure of internal target completion,they tend to use accrued earnings management;in the face of capital market performance pressure and historical growth pressure,enterprises are more inclined to use real earnings management to evade corporate governance and supervisory control.