Study On The Influence Of Strategic Radical Degree On Real Earnings Management

Financial fraud cases have increased in frequency in the capital market in recent years,and there are many types of financial fraud.among which the manipulation of finances through surplus management is somewhat representative.There is a possibility that earnings management would negatively impact the interests of investors,as well as the healthy development of enterprises and the achievement of value objectives.Real earnings management has increasingly replaced accrual earnings management In reality.Therefore,how to effectively control the real earnings management behavior,some scholars have started from the company ’s Strategy,and believe that Strategy,as the overall planning of the company ’s business development,plays an important role in the company ’s earnings quality and further affects the level of earnings management.Because it is difficult for enterprises that adopt the traditional strategic model of the industry to cope with the complex internal and external environment,most companies actively seek breakthroughs in the strategic development direction and choose radical strategies that deviate from the conventional level of the industry.However,the current research on the relationship between radical Strategy and earnings management is limited,and failed to reach a consistent conclusion.Informed by theories of information asymmetry,signaling,principal-agent relationships and strategic choice,by collecting data of A-share listed companies in China from 2010 to2021 and conducting empirical tests.The strategic radical degree is used as an indicator of radical Strategy to study its relationship with real earnings management.On this basis,we further explore the path of radical Strategy affecting the true corporate surplus management and the differences in the relationship between the two under different nature of ownership and with or without Big Four audits.After analyzing empirical results,we propose corresponding policy recommendations.Based on the results,strategic aggressiveness is positively correlated with true surplus management;agency cost is a path of strategic aggressiveness affecting real earnings management,that is,In enterprises with higher levels of strategic aggressiveness,agency problems will be more serious,which will have a greater negative impact on the real earnings management level of enterprises;analyst attention plays a positive moderating role between strategic aggressiveness and real earnings management;in addition,the further analysis revealed that Some differences exist in the relationship between strategic aggressiveness and real earnings management in different property rights and whether the four major audits.Finally,Researchers have come up with reasonable policy recommendations from a regulatory,listed company and investor perspective based on the above research findings.