Empirical Research On The Impact Of Earning Management Of Listed Companies Raised By The Revolution Of The Accounting System For Assets Impairment

Since 1998, the Ministry of Finance required listed companies to extract four depreciation preparations. In 2000, "enterprise accounting system" fully demanded eight depreciation preparations for all listed companies, then impairment of assets has become a commonly used tool for earning management for listed companies. This phenomenon has drawn increasing concerns of stakeholders, which made the Ministry of Finance promulgate the new accounting standards on February 15, 2006. Compared with the original accounting standards, the new standards have made many changes, which ought to make an enormous impact on the extraction and reversal of impairment of assets of listed companies. By use of impairment of assets, the earning management for listed companies should be greatly influenced. In this context, the paper studies the influence of earning management for listed companies made by the revolution of accounting system for impairment of assets.From the perspective of theoretical studies, the paper firstly probes the assets and the core of accounting for assets impairment, by using standard research methods. Then the comparative analysis between the existing accounting system for impairment assets and the original accounting system for assets impairment are made, from confirmation, measurement and disclosure point of view of assets impairment. The impact of earning management of listed companies made by the existing assets impairment accounting system is analyzed, and the relevant assumptions are raised.Secondly, by using empirical research methods, the paper observes the magnitude of changes of the net extraction rate of impairment of assets between 2005 and 2008 and in 2008 to verify the relevant assumptions, and following findings are reached:(1) The revolution of accounting system for Impairment of assets has not significantly lowered the level of earning management of listed companies in China. Through T test for independent samples of the net extraction rate of impairment of assets between 2005 and 2008, the significant differences are not found in the paper, which means the extraction and reversal of impairment of assets has not shown much difference.(2) Under the existing accounting system for impairment of assets, the phenomenon of earning management of listed companies by use of impairment of assets still exists. Through T test for independent samples of the net extraction rate of impairment of assets in 2008, the motive of earning management of listed companies in research samples are found on the whole.(3) Reversal of long-term assets impairment are not allowed in the existing accounting system for assets impairment, which objectively reduces the tools of earning management for listed companies, plays a restraint function for the abuse of the principle of conservative that is always used by listed companies.