Marginal Profit Of Listed Companies In China Study On Earnings Management

With the rapid development of China's securities market, the size of listed companies and its proportion of the national economy is increasing in increasing, which played an important role in economic stability and prosperity throughout the country. As the the important form of company's financial situation and operating results, accounting earnings's value information to users would be influenced if there exists earnings managemen. Unfair accounting information could mislead investors to make the wrong investment decisions and make the rational allocation of capital not conducive, disturb the formation of fair and effective capital market. Low-profit business show more strong earnings management motives than the loss of listed companies for its more than just break-even point, so the research of methods of earnings management is particularly necessary.With empirical method, this paper select the 2006-2008 listed companies with meager profit in China A share as samples. In First, frequency distribution method is uesd with three years 2006-2008 A-share listed company's net return on assets (ROE) for density tests, which confirmed the meager profits of listed companies in China widespread earnings management. Then 65 small profit in 2008 was selected as the research sample of listed companies and 65 normal profits of listed companies was selected as the control samples, make the empirical analysis based on total accruals and profits of the project specific of both. The empirical results show that discretionary accruals profits are meager profits of listed companies in China to manage earnings are an important way to choose. In the profits of the cost of specific projects operating income, depreciation and amortization of assets, investment income are the principal means of listed companies with meager profits in China to manage earnings.