An Empirical Study On The Marketing Reaction To Earnings Management Of Listed Companies In China

With the gradual development and enhancement on efficiency of securities business in China, and the strengthen of transparency and utilization to listed companies'financial report, earnings information has been one of important factors which have an effect on the price of stock. In addition, more and more policies, codes and contracts have made financial earnings to be many checks'basis. The importance of accounting earnings information has been standing out. Under the circumstances, managers as an informed player about real earnings information are to manage earnings to accomplish their goals. At present, the earnings management has gradually been focused on by investors, creditors, securities administering authority, the accounting standards board, taxing authority, etc.These days, many scholars home and abroad has given adequate experimental evidence that proves the existence of earnings management of listed companies, and this kind of deed has been found in many domains. But earnings management of listed companies must be based on investors not being able to identify it, or else, it will be meaningless. So the problem should be tested through scientific methods by scholars.The paper uses many research findings about earnings management for reference, and sets forth fundamental theory of earnings management. On the basis of it, the paper pus forwards its studying hypothesis from the analyzing to stock market in China. That is, stock market is not making the appropriate reaction to earning management. The paper chooses these two methods—CAR and ERC to test and analyze the research hypothesis. The studying result shows that investors cannot identify the earnings management of listed companies.The paper is divided into five parts:Part one: Introduction. This part mainly explains the studying background, research purpose, research methods and the article's structure.Part two: Fundamental theory and literature review. This part explains the concept, characteristics, conditions for birth and motives of earnings management and summarizes many empirical research findings about earnings management. Part three: Studying methods and sample selection. This part accounts for the defects of securities business in China and puts forward the hypothesis that is to be tested. This part also makes out empirical studying methods, the regression model of earning management, statistical tools, and so on. In addition, this part briefs the source of samples and data and describes the basic characteristics of samples.Part four: Empirical outcome and analyzing. This part explains and analyzes these outcomes of empirical studying by using CAR and ERC.Part five: Finishing up. This part summarizes research significance and points out the shortage of this studying.In despite of studying marketing reaction to earnings management in some certain degrees, there are some defects in the empirical design and the selection of studying methods. So it needs more improvements with the development of securities business in China and more and more intensive study about the thesis.