Research On The Impact Of Equity Incentives On Earnings Management In The IT Industr

Under the background of the increasingly mature modern enterprise system in China,the managers and owners of enterprises are inconsistent,and equity incentive has become a good way to alleviate the principal-agent problem.However,in order to meet the exercise conditions of equity incentive scheme,managers may conduct earnings management,and their shortsighted behavior damages the long-term development potential of enterprises,and the untrue earnings information also misleads investors.Therefore,it is of great significance to study the relationship between them to improve the formulation of equity incentive plan,reduce managers’ earnings management behavior and the long-term development of enterprises.Based on the data of information technology industry(hereinafter referred to as IT industry)from 2011 to 2021 and compared with A-share enterprises,this paper empirically studies the influence of equity incentive on earnings management.The empirical results show that equity incentive in A-share enterprises has a significant positive correlation with real earnings management,and equity incentive in IT industry has a deeper influence on earnings management.There is a significant positive correlation between equity incentive and earnings management in non-state-owned enterprises;The level of risk-taking plays an intermediary role in the relationship between the two.Based on the empirical analysis of IT industry,this paper also selects Z Company,a representative company in IT industry,as the further verification of the empirical results.According to the equity incentive situation of Z company,it is found that the motivation of earnings management of Z company is to meet the exercise conditions of equity incentive and maximize salary.During the equity incentive period,Z Company managed its earnings by expanding production,relaxing credit conditions and manipulating discretionary expenses.This paper hopes to put forward some useful suggestions on the scientific design of equity incentive scheme and the governance of earnings management through empirical analysis combined with typical cases.