Research On The Influence Of Fair Value Hierarchical Measurement On Earnings Management

Fair value is an important measurement basis for financial instruments,and the current standards related to fair value measurement(SFAS 157,2006;IFRS 13,2011;CAS 39,2014)stipulate that fair value measurement is divided into three tiers.Due to the constraints of objective factors such as China’s institutional system and the internal environment of listed companies,many problems are still hidden in the process of the widespread application of the fair value measurement model.Weak internal control of enterprises,deviations in the governance structure and differences in the quality of practitioners make fair value measurement invariably provide more possibilities for listed companies to carry out surplus management activities.In addition,unlike the financial industry,the regulatory requirements related to the fair value information of financial assets and liabilities faced by listed companies in the non-financial industry are more lenient,which increases the possibility for listed companies in the non-financial industry to use fair value for surplus management.At the same time,the uncertainty of corporate environment and internal control may also affect the implementation of accounting standards on fair value measurement to a certain extent.The greater the uncertainty of corporate environment,the more unpredictable and uncertain the access to fair value measurement input information is,which also provides opportunities for managers to conduct surplus management,while the internal control of enterprises can inhibit the management of listed companies to conduct surplus management.Based on the above analysis,this paper takes the listed companies disclosing fair value measurement hierarchy in Shanghai and Shenzhen A-shares in China from 2014 to 2021 as a sample,and uses empirical tests to explore the relationship between fair value hierarchy measurement and surplus management on the basis of theoretical analysis.It also introduces external environmental uncertainty and internal control as moderating variables,respectively,to explore the influence of both on fair value measurement and surplus management.Through theoretical analysis and empirical tests of the above issues,the following conclusions are drawn:(1)different levels of fair value measurement have different degrees of influence on surplus management;(2)environmental uncertainty has a positive moderating effect on the relationship between fair value measurement and surplus management,and this positive moderating effect is mainly reflected in the moderating effect on the relationship between fair value measurement and surplus management in the second and third levels;(3)internal control(3)Internal control has a negative moderating effect on the relationship between fair value measurement and surplus management,and this negative moderating effect is mainly reflected in the moderating effect on the relationship between fair value measurement and surplus management in Level 2 and Level 3.Based on the above empirical findings,this paper suggests that government departments should improve the fair value measurement standards and their application guidelines and increase the supervision of information disclosure;enterprises should improve the professionalism and professional judgment of accounting professionals in fair value measurement;establish a comprehensive risk management system to improve the ability to respond to environmental uncertainties;further supplement the part on fair value measurement in the basic standard of internal control to improve the internal control.measurement to improve the internal control system.The above recommendations are adopted to reduce opportunistic surplus management behaviors and enhance the reliability of fair value measurement information of enterprises.