Game Analysis Of Chinese Listed Company's Earning Management On The Basis Of Economy Hypothesis

Along with the development of Chinese securities market, people generally begin to value on value orientation and behavior of listed companies'stakeholder. Accounting information is the important basis for stakeholder's decision-making and distribution of interests. Earnings management influents the content and quality of accounting information, then affect the decision-making of stakeholders and direction of the development of enterprises. The earnings management on the current theory into practice with the industry sectors of common concern a hot topic of discussion.Based on literature data collection and sorting out, we can find that academics study of earnings management mainly in the concept, motivation and methods and other issues from home to abroad. This another way, with Chinese listed companies manage the movement of surplus ,selecting a new perspective such as earnings management, economy hypothesis and game theory combine, based economy hypothesis, carrying on earnings management game analysis of Chinese listed companies.As a broad concept, including the management of the surplus profit manipulation and other irregularities behavior, including in the selection of accounting policies accounting, legal means to regulate the conduct of profits. The management of the companies it as a mainstay and accounting information is on the object to maximize their own interests. As the economy is selfish and limited rationality and the nature of the incomplete information, making earnings management of listed companies is the presence of inevitability, also making earnings management among stakeholders may have a game.In conclusion predecessors on the basis theory, the article defined listed company earnings management stakeholders as company management, shareholders, creditors, and tax departments. On the base of Economy hypothesis scenario, we will analyze the game of the various stakeholders, and the establishment of earnings management game of key stakeholders.From the earnings management game model between the management and the shareholders .On the one hand, because earnings management offers shareholders shares, dividends from the opportunities, but also tax evasion, which the shareholders has some appeal. The other hand, earnings management irregularities exposed the grim consequences and the manager and the betrayal of the shareholders worried that, if caught in a dilemma. This resulted in earnings management game between the management and shareholders. Small shareholders in their own interest, want to earnings management, but feared that major shareholders and management conspire against their own interests, small shareholders and the management and major shareholders of the information asymmetry makes small shareholders with a variety of possible options. Management has choice of earnings management or not earnings management, major shareholders in large measure to influence the choice of management, and small shareholders are often not the ability.From the earnings management game model of management and creditors, we can see that Chinese enterprises indirect financing mainly rely on bank loans ,until the listing of the direct financing channels will be opened up. This management and creditors will have a game. Creditors generally will not lend to no profit or operating condition enterprises, only the sound operation of the enterprises can obtain loans. Those surpluses through management, whitewash financial indicators makes "good business" enterprises, access to loans if we fail to invest, Moreover, lending rates higher circumstances, the choice of the probability of default would be very high.From the earnings management game model between the management and the audit institutions, we can see that in reality listed company audit relationship and audit activities, the audit clients as a shareholder were empty, authorities to a double identity (actual audit clients and audit) exists in the audit activities. This will have a game. For the sound operation of the enterprises, the audit will not have general conspiracy. Not good for business enterprises. To attract investors, or allotments, in addition to audit clients (shareholders) status empty, it is easy for earnings management audit conspiracy.From the earnings management game model between management and tax departments, we can see that income tax is the more obvious cause to promote the management of the company for earnings management. State revenue is an important source of finance, resulting in the earnings management game between the management and tax departments. If the State provides the high duty will increase probability of earnings management. If the State provides the tax rate is too low, it would be detrimental overall economic development of the country.Based on the above Game analysis, this article presents the corresponding earnings management. Including that, establishing management stock option incentive mechanism.Stricting division may disclose confidential commercial information and the limits establish a good credit rating system, the introduction of the "camera control" mechanism. Enhanceding CPA independence, establishing a sound audit practice standardized system, and strengthening the CPA regulatory constraints. We Implement a reasonable rate, strengthen tax analysis, improvement of the tax policy, increasing revenue and supervision.