Surplus Distribution And The Extent Of Earnings Management

Since 2007, the objective of the implementation of the new accounting standard converging with the international is to improve the quality of accounting information. But the criteria is not complete, the introduction of fair value measurement, accounting policies and estimates choices may become a tool for earnings management, and accounting standards are closely related to earnings management。The earnings management would mislead users of information, impact on capital market。Existing literatures are maily focusing on the relationshiop between specific criteria and earnings management, not comparing the earnings management before and after implementation of new accounting standards to determine whether the accounting standard has decrease the level of the earnings management。Since accruals model failed to describe the level of earnings management of the whoel market, more and more researcher uesed distribution tests. Based on Cognitive Reference, Major Figures and Benford law theory, we used Thomas test and method of calculation of earnings management proposed bu Kinnunen and Koskela to study the market and the critical threshold of 0 company.We found:before and after the implementation of accounting standards, the real probability of percentile figure 0 of the whole sample were higher than the theoretical probability, while 9 reverse, it showed that corporate management adjusted the earnings to the reference point, but after the implementation of new accounting standards, the level of earnings management of profitable company decreased from 2.96% to 2.25%, the market's decreased from the 3.27% to 1.35%, while t test showed the range is not significant; the real probability of the percentile figure 1 and 2 of low-profit company were higher than the theoretical probability, while 9 reverse, destroyed the Benford law; after the implementation of the new accounting standards, the level of earning management with low-profit increased from 6.6% to 12.61%, for it, we thought that despite the impairment of long-term assets are no longer allowed back, but the fair value measurement attribute become the tool for low-profit company to adjust earnings. The earnings management lever of the low-profitable companies were higher than the whole maket, it shows that the low-profitable has a stronger motivation.