Research On The Influence Of Financing Constraints On Earnings Management

Earnings management is a iterative focuses in the field of corporate research.At the beginning,researchers paid most attention to accruals.With the development of supervision and companies,the real earnings management that manipulates actual business activities came into being,and the classification transfer earnings management that adjusts core profit by changing the composition of net profit has also gradually received more attention.The degree of corporate earnings management is the result of the comprehensive use of various earnings manipulation means by the management,and should be identified soon.In the meantime,in recent years under the relatively tight fund environment,financing constraints are still the main topic of concern of all circles of society and researchers.Under the condition that financing is expensive and difficult,earnings management is a good way to alleviate financing constraints.Therefore,A-share listed companies in Shanghai and Shenzhen from 2009 to 2020 are selected as research objects to empirically verify the earnings management strategies adopted by companies with financing constraints.Moreover,when enterprises face financing constraints,they will carry out positive and negative earnings management methods.Further,internal control variables are introduced to study whether internal control,an internal factor of an enterprise,will have a moderating effect on the relationship between financing constraints and earnings management.Finally,KZ index was used instead of SA index to measure the degree of financing constraints to test the robustness of the study.Besides,2SLS regression was conducted to test endogeneity by excluding the industry average financing constraint level outside the company as instrumental variable.After interpretation,we draw the following conclusions:(1)Enterprises facing financing constraints will adopt three earnings management methods: accrual,real and classified transfer.When the company’s financing constraints are higher,the degree of accrual earnings management,real earnings management and classified transfer earnings management will be higher.(2)When the target performance is not achieved,the management will adopt three positive earnings management methods.When corporate performance fluctuates greatly,in order to maintain stable profits and attract investment,enterprises will carry out negative real earnings management.(3)Internal control can enhance the effect of corporate governance,compress the operating space of accrual and classification transfer earnings management,and restrain the positive influence of financing constraints on these two types of earnings management.However,the main construction purpose of internal control is compliance,which can not restrain the real surplus of fabricated actual transactions.