Research On The Impact Of Media Reports On Accrued Earnings Management

Research on accrued earnings management and media reports has always been a hot topic in the accounting profession.On one hand,media reports may attract government’s attention and supervision to decrease companies’ earnings management.On the other hand,media reports increase public’s attention on companies,which may lead companies to increase short sighted behavior and increase earnings management.Whether media reports will affect earnings management is a worthy topic to discuss.And if companies do have short sighted behavior,is there other ways to alleviate the bad effect of media reports on earnings management.Therefore,this paper will discuss the effect of media reports on earnings management,taking all A shares-listed companies of Shenzhen stock exchange as research sample,from year 2014 to 2017.Also,this paper separates reposts into negative or not negative reports,to discuss which kind of report will affect earnings management to a more extent.Lastly,audit quality and internal control quality will be taken into account to separate samples into two groups,in order to find whether they can alleviate the bad effect of media reports on earnings management.According to market pressure hypothesis,media reports will bring much attention to the company’s net income performance,and if companies’ net income can’t meet market’s expectation,investors may sell out companies’ stock,which may affect companies’ stock price and CEO’s benefits.So such pressure may force managers to increase accrued earnings management.The paper has reached four conclusions: firstly,media reports will cause managers to increase accrued earnings management to satisfy the earnings expect;secondly,compared to non-negative reports,negative reports has stronger effect on accrued earnings management;thirdly,good audit quality can help alleviate the effect of media reports on accrued earnings management;lastly,good internal control quality can help alleviate the effect of media reports on accrued earnings management.Therefore,this paper suggests managers to regard media reports as a supervision way to enhance company’s governance.And government should enhance the development of media supervision mechanism,guiding media to play a positive role to supervise the listed companies’ behaviors as an external way.Also,enhance the quality of internal control system and external audit,alleviate the pressure caused by media reports,in order to decrease companies’ earnings management and protect investors.