Empirical Research On Earnings Management Of Listed Agribusinesses

The basic features of the agribusinesses are that the reproduction of plants and animals intertwines with the reproduction of economic, and how to recognize, measure and disclose the bioasset which is important for agribusiness is much more complex in the accounting. So these are the reasons why the recognition, measurement and disclosure of the agribusinesses operations are complex. On the other hand, governments at all levels have an incentive to subsidize the agribusinesses, government subsidies constitute a main source of non-recurring gains and losses, and then constitute an important part of the profit. All of these factors provide a broad space and possibility of earnings management for the agribusinesses.The descriptive statistics on the indicators of the agribusinesses show that, increasing the ROE(return on equity) and EPS(earnings per share), thus to achieve the required passing line of relevant policies and regulations is still the external performance of earnings management of the agribusinesses. If the ROE and EPS are the only factors to be concerned when the operating performance is assessed or the allotment of shares and the quality of additional offering is checked while neglecting their reasons of indicators'running up, the judgement and behavior of captical market would be misled to a great extent. This is not favourable towards investigating the real operating position and the future development perspectives of the agribusicesses comprehensively, giving the quality of allotment of shares to the well-run firms, and then realizing a rational allocation of resources.The measurement to the relavent indicators with Jones model shows that negative earnings management possibility exists through the way of reducing the net profit by the agribusicesses. The bioasset has an important effect on the composition of asset and profit levels. Bioasset and its impairment are the important means of earnings management that comes from the inside of the agribusinesses.Regression model discloses that the more weaker solvency a firm is, the more likely to obtain government grants, so the agribusinesses with the higher asset-liability ratio is more likely to obtain more government subsidies. Gaining the government subsidies is an important meathod of earnings management, governments help the firms manage their earnings from the outside.Consequently, both the bioasset and the government subsidies from the inside and outside make the difference between the agribusiness and others, furthermore the capital market can make a certain reaction towards the specialities of the agribusiness accounting information, thus the accounting statements of the agribusiness contain certain information content.It is because of bioasset and government subsidy play a common role in the agribusinesses, to bring the agribusinesses earnings management under control, methods should be done from completing both the bioasset and government subsidy standards in recognition, measurement and disclosure. Besides, accounting integrity should be strengthened in order to govern the earnings management.Generally speaking, in order to control the earnings management and strengthen the accounting integrity construction, the main factors are strengthening accounting supervision, disciplining the dishonest and the integrity of directors. Construction of accounting integrity ensures the authenticity of accounting information and the benefits of investor, creditor and other related parties, in addition, it favors a sustainable, healthy development of capital market.