A Study On The Effect Of Product Market Competition On Earnings Management

Since the reform and opening to the outside world,especially since joining the WTO in 2001,China has been keeping up with the pace of the world and strictly promoting economic globalization and the process of world integration.It is precisely because of this time and institutional background,all industries are facing more and more fierce competition,including not only the private enterprises that have emerged in large numbers as a result of the reform of state-owned enterprises,but also the foreign enterprises that have been continuously entering as a result of the reform of the tariff system.Based on the principal-agent theory,information asymmetry theory,information hypothesis of product market competition and liquidation threat hypothesis,With accrual earnings management and real earnings management as factorvariables,with tariff reduction as the independent variable,this paper selects the panel data of manufacturing listed enterprises from 2002 to 2012 to study the relationship between product market competition and earnings management.The study found that:(1)the competition in the product market effectively inhibited the accrual earnings management;(2)the competition in the product market effectively inhibited the real earnings management;(3)After the implementation of the new accounting standards,the competition in the product market effectively induced the accrual earnings management and real earnings management;(3)The implementation of new accounting standards weakens the restraining effect of product market competition on earnings management and real earnings managementBy exploring the impact of product market competition on enterprise earnings management,this paper helps to provide the regulatory focus for government regulatory departments.