Intangible Assets And Enterprise Earnings Management

With the development of science,technological progress,and accumulation of knowledge,human society has entered the information age from the industrial age.Intangible assets represented by patent rights are becoming increasingly important in the daily production and operation activities of enterprises.The increase in intangible assets of enterprises can improve process flow,upgrade existing products,and enhance their market competitiveness.At the same time,broad intangible assets such as organizational structure,customer resources,and human capital can improve organizational efficiency,improve corporate image,and enhance the social influence of the enterprise.Although relevant laws in China have regulations on the disclosure of intangible assets,there is strong subjective selectivity in the capitalization treatment and accounting treatment of intangible asset amortization during the research and development period of intangible assets.Enterprises can achieve accrual earnings management by adjusting the accounting treatment of intangible assets.At the same time,the names of some intangible assets are obscure and difficult to understand,which also increases the manipulation space for enterprises.Investors in the capital market cannot directly participate in the business activities of enterprises,but rely on publicly disclosed information to make investment decisions.Good financial statement quality is conducive to the formation of market efficiency.Therefore,studying the relationship between intangible assets and enterprise earnings management has strong practical significance.Based on this,this article starts from the innovation theory,resource-based theory,MM theory,and information asymmetry theory,and explores the impact of intangible asset proportion on the accrued earnings management of enterprises after the implementation of the new accounting standards in 2007,based on the fixed effects model.The research results indicate that as the proportion of intangible assets in a company increases,the company will increase its level of accrual earnings management.After considering the direction of earnings management,the increase in the proportion of intangible assets will significantly increase the company’s positive accrual earnings manipulation.The competitiveness of enterprises mainly comes from the intangible assets created by enterprises,namely intellectual property intangible assets represented by patent rights and copyrights.Intellectual property intangible assets have a stronger impact on earnings management,and investors should pay special attention to the potential impact of intellectual property intangible assets on corporate earnings.The continuous progress of enterprise technology can increase market recognition of enterprises and to some extent alleviate their proactive accrual earnings management.However,the positive role of intellectual property intangible assets in earnings management has been further strengthened,and a similar phenomenon exists in hightech enterprises.Investors need to pay more attention to it.The initial investment in the research and development of intangible assets is huge and carries high risks.Compared to tangible assets,the collateral properties of intangible assets are weaker.Under the indirect financing system dominated by traditional bank credit,banks increase loan interest rates to reduce their own risks,resulting in higher external financing costs for enterprises than their internal financing costs.Enterprises face financing constraints,and those with higher financing constraints will actively increase their accrued earnings management,That is,financing constraints play a part of the mesomeric effect in the process of intangible assets and accrued earnings management.