The Research Of External Earnings Pressure And Earnings Management In Listed Companies

Earnings management has always been a hotspot in academic research.However,either accrual earnings management or real earnings management,previous researches have mainly remained at the level of corporate governance.With the development of industry of securities analysts,many scholars have started to focus on the external supervision mechanism of earnings management,trying to figure out the relationship between analyst behavior and earnings management.Although researches have shown that analysts' earnings forecasts on firms would affect earnings management strategy,most of these researches focused on the divergence between analysts forecast earnings and actual earnings,which is representing the impact of the accuracy of analysts' earnings forecasts or analysts following on earnings management.There are few researches focus on their relationship from the perspective of external expectations.This study based on the external earnings pressure,which results from the differences between analysts' earnings forecasts and internal operation expectation of corporate,trying to explore the impact of external earnings pressure on earnings management.Therefore,this study mainly solves the following issues:(1)How does external earnings pressure effect earnings management?(2)Based on the perspective of internal corporate governance,after considering the performance sensitivity of managers,is there any difference in the impact of external earnings pressure on earnings management?(3)Based on the perspective of external supervision mechanism,after considering analysts' attention,will the conclusions of the above questions change? Specifically,we select Shanghai and Shenzhen A-share listed companies with analysts' earnings forecast data from 2009 to 2017 as samples,and empirical studies have found that: First,external earnings pressure will simultaneously increase the degree of accrual earnings management and real earnings management of companies.And this effect is mainly reflected in companies with high correlations between managers' compensation and performance,indicating that managers are catering to external investors in order to pursue their own interests.After distinguishing the specific means of real earnings management,it was found that managers mainly implement real earnings management through production manipulation and cost manipulation.Second,facing external earnings pressure,state-owned enterprises tend to use accrual earnings management,and non-state-owned enterprises tend to use real earnings management.Finally,the higher analyst following can reduce the impact of external earnings pressure on accrual earnings management,but it will increase the impact of external earnings pressure on real earnings management,indicating that analysts are exerting supervision while also exerting pressure,which leading managers to reduce accrual earnings management and turn to use more real earnings management,which is more concealed.The main contribution of this study is: First,we chose a new research perspective.External earnings pressure results from the divergence between analysts' and management's earnings expectations,and we incorporate external earnings pressure into the research framework of earnings management,which is not only expands the motivation research of earnings management,but also a good reference to standardize the development of analyst industry and strengthen corporate supervision.Secondly,from the perspectives of internal governance and external supervision,this article examines the differences in the impact of external earnings pressure on earnings management under different levels of management compensation incentive systems and analysts' attention,providing new evidence for internal and external governance mechanisms.Finally,based on the application of research results,this paper points out that analysts should strengthen their understanding of various complex industries and real earnings management methods,and companies should formulate a scientific and reasonable management performance evaluation system,and the regulatory agencies should consider the impact on the two types of earnings management when they formulate policies,investors should correctly identify the information transmitted by the market and make rational investment decisions.