Research On Earnings Management Based On Salary Contract Of Enterprise's Management

Owners of the company always decide weather the company is earning or lost by financial ratio and basic financial data, and then decide weather give the management rewards or punishment. So the management has the motivation to do earnings management.This article try to destroy the relationship with compensation system and earnings management based on the management compensation system. First summarized the study results about earnings management, and then explained the meaning of earnings management and others, at last selected 1020 listing companies listed in Shanghai and Shenzhen Stock Markets as samples to find the relationship for the two aspects in the way of empirical test. The result of the empirical test proved that management compensation has no obvious correlation with earnings management, shows that there is no strong incentive for managers to do management earnings to increase personal income. This article also gives some suggestion for the management compensation incentive of the company and the governance system, hope to reduce the possibility of earnings management, and strengthen the constraints of earnings management.This article will have some meaning in improving the management compensation system, improve earnings management and enhance the quality of company's financial information.