Research On Inventory Falling Reserve And Earnings Management Of The Listed Companies

Inventory depreciation reserve as an important part of the asset impairment provision,the role of the cannot be ignored,on the one hand,as a part of the balance sheet,inventory provision affects the enterprise the assets in the balance sheet,on the other hand,the accounting treatment with corresponding inventory provision of accounts-reflected in the enterprise asset impairment loss in the income statement,as a result,stock price impact on the company’s annual report information to be reckoned with,and some companies even inventory write-down as one of the major means of surplus control.Earnings management is an important topic of the modern accounting theory research.Important indicator of accounting surplus as a measure of enterprise management,has always been a investors,managers,creditors,government departments concerned.Accounting surplus on behalf of the investors in the how much the money to earn profits and influence managers’ compensation levels,is all kinds of securities capital market valuation basis,government tax is closely related to earnings.It is because of accounting surplus information is so important,the enterprise will try to manipulate earnings,the phenomenon of earnings management of listed companies is more and more common.In 2006,the ministry of finance formulated the accounting standards and required listed companies to implement them on January 1,2007.Among them,the criteria for financial instruments recognition and measurement will be listed as financial assets,which will be measured in amortized cost,which will be significantly changed the accounting system.But the inventory rule does not make a substantial difference in inventory impairment.With the asset impairment criteria once the provision for impairment of a long-term asset is made during the period of later return does not allow the provisions of the different,provision for bad debt or inventory write-down when value standards are allowed to resume its back,visible companies remain the space of earnings management.With the steady progress of the reform process of accounting standards in China,and the space for management surplus management of enterprises has gradually increased.Accounting standards of provision for bad debt provision ratio for the aspects such as the enterprise the space of free choice,and the calculation of net realisable value in inventory write-down aspects need accounting personnel professional judgment,both to the enterprise use impairment loss of earnings management has provided the opportunity.As long as within a certain range,earnings management can play a reasonable role in managing profits.But,in the spring of 2017 released by non-financial listed companies in China financial security review of Themis pure quantitative outliers rating analysis shows that 1139 listed companies exist different degrees of financial statements whitewash,accounting for 43.32% of the total sample of listed companies.Visible,faced with price,regulation and retreat city,such as pressure,the greater the financial risk of listed company,its financial statements whitewash the motive and intention more strongly,the higher the possibility that financial statements whitewash,non-financial listed companies overall financial security situation in rapid decline.This paper studies the method of combining theoretical analysis with empirical analysis.The theoretical part starts from the basic concept,and expounds the theoretical basis and the execution significance of the accounting for the impairment of current assets.The empirical part is whether use the inventory falling price to make the analysis of surplus management.In this article,through the database collection and screening guidelines issued after inventory write-down of the data of listed companies as research samples,provision for inventory write-down and turn one by adding variables influence factors analysis,and on the manufacturing of the inventory write-down more inventory category analysis.When discussing the influencing factors of the value impairment of enterprises,it is divided into two aspects: economic factor and earnings management.Economic factors with the company’s main industrial economic and earnings growth rate,but has nothing to do with the sales situation,displayed on the operating performance,the better the economic situation better,the company’s industry,the provision for assets impairment,the more likely it is company.In terms of earnings management factors,the ratio of liabilities,management changes,and the size of the bath are significantly correlated with the size of the company,and there is no positive correlation with the surplus smoothing.Find a case study of a company that has a significant fluctuation in the inventory price of 10-15 years.To further explore the company under the motivation of earnings management,"big bath" or "surplus smoothing" behavior,the influence of the provision for assets impairment value relevance of financial statements,in order to determine whether the investors can insight into the behavior of earnings management,evaluate the provision for assets impairment.The empirical results show that the management using the speculative surplus "big bath" case,the provision for assets impairment will make surplus value relevance decline,while the rise in the value relevance of the book value of the rights and interests.In the case of "surplus smoothing" of information surplus management,the value correlation of the surplus will be increased while the value of the equity book value decreases.Excessive earnings management will affect the quality of accounting information,accounting information distortion,has violated the professional ethics,seriously degrade the quality of financial reporting,causing investors make mistakes or invalid decisions,make creditors face greater risks,leading to the relevant regulatory authorities also cannot make effective regulation.In essence,earnings management is a kind of financial behavior that contains deceitful or fraudulent nature,and should be checked for the healthy development of capital market.In this paper,the research aims at inventory write-down impact on earnings management and the change of the new guidelines after inventory write-down shift status in the earnings management to provide empirical evidence,to put forward reasonable Suggestions for the establishment of accounting standards and the accounting information users to provide evidence for the importance of inventory write-down information,to eliminate the interference of inventory write-down of accounting information,to make good decisions.