The Study Of Earning Management Based On The IPO Company With Potentiality

Scholars at home and abroad found that, in order to obtain the opportunity for IPO(Initial Public Offerings), companies would do the earnings management to make their performance better. Well, whether the companies with high potentiality would do the earnings management before and after the IPO, the relation between the potentiality and the earnings management before and after the IPO would be answered by the paper. GEM (Growth Enterprises Market) which was opened since October 2009 is widely concerned by the academics and the community. Because of the platform for financing which is supplied by the GEM, lots of high growth and high-tech companies tried their best to obtain the opportunity of going public on the GEM. On the other hand, regulators take the potentiality as the standard to filter the enterprises which are applying for going public on the second board.Therefore, this study took the enterprises listed on the GEM as the sample and used empirical method to answer the following questions:whether the company listed on the second board doing the positive-going earnings management before IPO, whether the operating income growth rate and the net profit growth rate which represent the potentiality of the company would change before and after the IPO, and what is the relation between the potentiality and the earnings management before and after the IPO. Based on angle of corporate growth, and binding the theoretical analysis, literature reviews, and the characteristics of the GEM, the paper raised 6 conjectures which were verified by the combination of descriptive statistics and empirical methods.The empirical analysis draws the following main conclusions:the operating income growth rate owned significantly different before and after the IPO, the net profit growth rate owned unsignificantly different before and after the IPO; the companies which were listed on the GEM did the significant positive-going earning management before the IPO; the operating income growth rate owned significantly positive correlation with the maneuverable accrued profits, but the net profit growth rate owned unsignificantly positive correlation with the maneuverable accrued profits befoe IPO; the companies which were listed on the GEM did the significant positive-going earnings management on the IPO year and the year after IPO year; the operating income growth rate owned significantly positive correlation with the maneuverable accrued profits, but the net profit growth rate owned unsignificantly positive correlation with the maneuverable accrued profits after the IPO. The paper was helpful for verifying the reality of the potentiality of the companies which were listed on the second board and was helpful for improving market access. At last, the paper presented some suggestions of the market access, the supervision and controling of the GEM.