Research On The Correlation Between Related Party Transactions And Earnings Management Of Chinese Listed Companies

Since Jones' s pioneering research,Western research on operational accrued profits affecting earnings management has been relatively complete.However,the systematic analysis of the correlation analysis of the behaviors of 11 related party transactions and earnings management is scattered.With the steady progress of China's accounting standards reform process,enterprises have gained more autonomy in choosing accounting policies and accounting estimates,and the space for corporate management's earnings management has gradually increased.Accordingly,related party transactions have become more complex and changeable.In recent years,China's theoretical and practical circles have also done some research on related party transactions and earnings management,but there are still some problems that need to be improved.The correlation between 11 types of related party transaction behavior and earnings management has not been analyzed and summarized.It has not explored which of the related party transaction factors has the greatest impact on earnings management.In view of this,this study chooses to take the conflict of interest and benefit transactions of related party transactions as the starting point.It mainly uses empirical research methods and targets Chinese listed companies to try to unveil the intricate and complex relationship between connected party transactions and earnings management.And systematically and deeply explore the earnings manipulation behavior of related party transactions,and the market's response to this earnings manipulation behavior.This study mainly discusses the following:(1)the analysis basis of this study,determination of influencing factors,and empirical analysis;(2)empirical analysis of upward or downward earnings manipulation issues on this basis;(3)other comprehensive analysis.Through empirical analysis,it is found that the conclusions of the study are as follows: According to the data of listed companies in China from 2007 to 2016,no matter which kind of related party transactions,the greater the value,the greater the degree of earnings management.The higher the company's free cash flow and the larger the number of related party transactions,the lower the degree of earnings management.In other words,such companies have a lot of funds.They will engage in related party transactions to transfer funds but will not and need not engage in earnings manipulation! When investment institutions make investment decisions,the possibility of fraud and fraud of such companies is greatly reduced,corresponding risks can be avoided,investment losses can be reduced,and investment accuracy can be improved.Combining empirical conclusions,for companies with a high degree of earnings management,they must not do nothing,but should actively treat the desirable attitude of certain economic consequences caused by earnings management.This research proposes relevant suggestions from the perspective of information asymmetry to disclose related party transactions.At the end of this research,the following enlightenments and prospects are proposed:(1)using knowledge from other disciplines such as econometrics,statistics,and empirical analysis to accelerate the improvement and development of generally accepted financial accounting principles;(2)distinguishing between listed and non-listed companies(3)Learn and draw on foreign successful accounting experience.