Study On Earnings Management And Performance Evaluation At Commercial Banks Of China

In recent years, some of the listed companies in our country have produced a number of"infidel"accounting messages. Part of these messages is due to the forgery in accounting which violates the concerned laws and regulations, and norms; and the other part is due to the earnings management conducted by the top managing personnel in these listed companies. Because of the invisibility of infidelity in accounting messages deriving from earnings management, importance has not been attached to it by the participants in capital market, or basic skills in reorganization of earnings management has not been in place. Listed companies of commercial banks, which have been under strict regulation, often get involved in the check against earnings management. Therefore, it is of great theoretical and practical significance for commercial banks to check against earnings management and conduct researches on the causes leading to it, so as to enhance the operation, management and performance of commercial banks, to strengthen the regulation on them, and to widen the perspectives for investors to analyze their investing potential. The thesis contributes to the innovation of theoretical research on earnings management, and of perception and practice of interested parties of commercial banks.Earnings management is the judges and choices made in the preparation of financial report and the change of financial report when constructing a trade matter by the managerial level of a company to transmit to the market the prefixed, manipulated and purposeful earnings information or to affect the outcomes based on the contracted accounting data. It is commonly acknowledged that earnings management violates the quality maxim and principle of neutrality so that it lessens the reliability and relativity of accounting messages.As public enterprises in running currency credit, commercial banks, the four state-owned ones in particular, play a key role in the state economic and financial life as well as in the stability of politics and society as a whole. The security and mobility instead of profit of commercial banks remain as the focus of the state and the mass before share reform. Since earnings management comes out to meet the demand for profit after share reform, this thesis, focusing attention on the earnings management and concerned performance evaluation of commercial banks, is of theoretical and applicable value for the going situation.Based on the historical literature review of research on earnings management, six goals are set in this thesis:①the relationship between earnings management and financial management of an enterprise;②systemic analysis on the formation of earnings management;③check against the earnings management in the commercial banks in our country;④the characteristics and ways and means of earnings management in the commercial banks in our country;⑤a tentative study on the approaches of performance evaluation in the commercial banks in our country;⑥proposals of ways and means in evaluating profit quality of commercial banks in our country.Earnings management is an interdisciplinary field. My research is conducted with the employment of mechanisms and methods in philosophy, economics, finance, and statistics, combining prescriptive and empirical studies. This thesis also features the shift of research perspective.I assume earnings management as a major aspect and a subsystem of financial management of an enterprise, a process from behavior controlling to information controlling, and a tie connecting entity economy with information economy. On the basis of this assumption and a distinction of profit manipulation from it, I re-systemize earnings management, with focus on the characteristics, the living condition and methods of it. Then cases are introduced into this framework for research. With a view on the peculiarities of the commercial banks in our countries, I study the performance evaluation on two levels: the internal and the external level of commercial banks.This thesis consists of six parts:The first part is introduction which gives an introduction of the significance and background of the thesis and a historical literature review on the definition, motivation and methods of earnings management. This part also introduces the goals, content, paradigms and innovations of my research. The second part concerns earnings management and finance management. I hold that earnings management is a major aspect of finance report. Based on the systemic analysis under the fixed theoretical framework in the thesis, I come up with some new ideas on the definition, characteristics and methods of earnings management.The third part concerns the going situation and peculiarities of earnings management in the commercial banks of our countries. I take a holistic view toward earnings management and make explanations for the even profit of commercial banks.The fourth part concerns the ways and means of earnings management. I summarize the major ways and means of earnings management in commercial banks with a view on the sound accounting policies and operation of commercial banks. The earnings management in the share reform and public issuing of state-owned commercial banks is a major case for discussing this matter.The fifth part concerns the performance evaluation system in commercial banks of our countries. The performance evaluation system is of great importance for both external information users and internal managerial personnel. Commercial banks have made unremitting efforts to a profit-oriented performance evaluation system. I introduce the mode of balance score card, macro-level financial messages and yearly report into this system.The last part is conclusion. With the inappropriate earnings management excluded, I give a brief suggestion on regulating earnings management. The innovations of this thesis are:1,the new perspective on fundamentally theoretical research on earnings management. Taking earnings management as a major aspect of finance management, I maintain that information management be taken into finance management and information effect be taken into account when studying the operation of an entity.2,Comparing the operation data with other listed companies, I make a survey of the going the situation of earnings management in the commercial banks of our country.3,With the finance design as a major aspect in discussion, I summarize and analyze the major ways and methods of earnings management, taking even profit as the main characteristic for it.4,The mode of balance score card and the release of yearly report are introduced to performance evaluation of commercial banks of our country.5,This research can promote the modern accounting theories and their research paradigms. Profit-oriented performance evaluation system contributes to the bettering of bank management structure, organization behavior and control, salary plan and regulation on stock market.