Empirical Analysis On Earning Management Of Using The Inventory Revaluation Reserve

February 15,2006 Ministry of Finance issued new accounting standards, Impairment of assets in which the content of the guidelines changed greatly, mainly away from the reversal of long-term assets to allow the practice of impairment, impairment of long-term assets can not be reversed once the accrual. Provisions of the new guidelines will undoubtedly have a major impact performance of listed companies. The new guidelines prohibit reversal of impairment of assets for impairment of long-term assets, and requires listed companies to prepare financial statements for the reversal of the impairment will be significant issues as to the disclosure。Impairment of assets of the "regulator" function into a one-way by the way, greatly reduce the regulatory function, thus preventing abuse of the effect of impairment of assets adjusted profit greatly enhanced, and can effectively curb the use of long-term profits in order to adjust for asset impairment whitewash the behavior of the financial statements。But this criterion is only limited impairment of long-term assets can not be reversed, for inventory, accounts receivable, and financial tools can continue to provision for impairment and back. Therefore, this paper selected in 2005 to 2008, mining, real estate, wholesale and retail, and manufacturing companies as the object 676, using cross-section modified Jones model and comparative analysis, the results show that changes in the new guidelines, the listed company Provision for decline in value of inventory preparation has added significant trend, while the provision for decline in value of the level of inventories they manipulate accruals and significantly negatively correlated, that is inventory to market impact report preparation is an important factor in earnings, so, beginning in 2007, stock decline in value of the earnings management of listed companies more significant. It can be seen that the new guidelines introduced in 2006 relating to "asset impairment loss is confirmed, can not be reversed in subsequent accounting periods," De Guiding, strong of Xianzhi the Shangshigongsi Li Yong fixed assets, intangible assets and projects in the Jian Deng long-term assets, earnings management, management is more inclined to use short-term assets, impairment of earnings management, then, stock decline in value in earnings management in a more prominent position.This paper aims to prepare for the inventory to market the impact on earnings management changes and new guidelines for decline in value after the stock position in the change in earnings management to provide empirical evidence for the formulation of accounting standards and make reasonable suggestions for the decline in value of inventory accounting information users ready to attach the information to provide the basis for further stock decline in value excluding the interference of the accounting information to make a favorable decision.