Research On The Impact Of Gambling Agreements On Corporate Earnings Management

Valuation adjustment mechanism as a way to effectively solve the information asymmetry of investors,which is increasingly being adopted by investors in National Equities Exchange and Quotations(NEEQ).The complete performance of the financiers involved in VAM is not satisfactory,and it is also doubtful whether the earnings management has been carried out.The abuse of earnings management will not only affect the development of enterprises themselves,damage the rights of investors,but also undermine the order of the market economy,which is not conducive to the overall development of China's economy.Therefore,it is very urgent and necessary to find out the motivation and means of enterprise earnings management at an early stage.First of all,this paper summarizes the analysis of the existing domestic and foreign literature on VAM and earnings management,and sorts out related theories.Secondly,based on the performance of the NEEQ listed cor:porates,proposed whether VAM is the motive of earnings management,whether different compensation clauses will affect the earnings management behavior,whether the corporates will have different earnings management behavior at different time,and what factors affect the level of corporate earnings management.In order to scientifically analyze the impact mechanism of the VAM,its compensation method,its progress on the accrual-based,real and classification shifting earnings management of the NEEQ enterprises,and the reasons why there are different levels of earnings management,this paper takes the 2014-2017 NEEQ listed enterprises as the research object,uses the OLS regression method for 18294 valid samples,uses the robust standard to handle the heteroscedasticity,uses the annual and industry fixed effect models to study the influence between the VAM,the VAM's compensation method,the progress and the accrual-based,real and classification shifting earnings management of NEEQ enterprises.Besides,this paper use propensity score matching method(PSM)and alternative agent variable method to check the analyzed results.Through empirical analysis,the study found that the enterprises that signed the VAM have higher accrual-based earnings management and classification shifting earnings management level than the unsigned enterprises,which proves that the VAM will bring pressure to the enterprise,so it becomes one of the reasons of enterprises' earnings management.At the same time,in the enterprises that signed the VAM,the different compensation methods have different degrees of influence on earnings management.Compared with the compensation in the form of cash and share repurchase,the agreement which is to transfer the shares for compensation has a higher degree of classification shifting earnings management;besides,when the financier is in the performance period,the closer to the end,the more real earnings management will be use.Finally,managers'overconfidence is one of the reasons why the financer signed the VAM uses earnings manegement,and the managers are more overconfident,the degree of accrual-based and classification shifting earnings management are higher.In order to solve the problems,this paper proposes that the financiers should reasonably evaluate the enterprise value,improve the operation and strengthen the risk management;the investors should carefully design the terms,pay attention to the earnings quality,and strengthen the post-investment management;the regulatory department should increase the punishment and improve the external institutions supervisory effect;the accounting standards setters should clarify non-recurring gains and losses provisions and recommend improvements to the standard loopholes.