The study of motivation of earnings management is mainly centered on capital motivation now in our country, and the study of construction motivation is less. There are two kinds of contraction that affect earnings management, i.e. compliment contraction and debt contraction. The paper studies the effect of compliment contraction and debt contraction on earnings management based on the data from the report of Private List Company. And then an analyzing model is build. In the model, we use direct compliment and managerial ownership stand for compliment contraction variable, and debt/equity ratio debt contraction variable. This model is utilized to analyze the relationship between three kinds of variables and the degree of earnings management. And the results show that a) there is significant positive correlation between directs compliment and earnings management. The more compliment directs have, the more level of earnings management is; b) the correlation between managerial ownership and earnings management is nonmonotonic, consistent with our model. The model suggests that as managerial ownership increases, earnings management decreases for both high and low levels of managerial ownership, while it increases for intermediate levels of managerial ownership; c) the relationship between debt/equity ratio and earnings management is significant positive. The level of earnings management increases while the debt/equity ratio... |