Chinese Listed Companies Of Earnings Management Incentives Analysis And Empirical Research

The stock market has become an important way of financing for companies in China, however, earnings management, to a great extent, distorts the reality of accounting information and leads to irrationality of resource collocation, as a result, earnings management affects the development of the company and the whole stock market. Because of the universality of earnings management, it is necessary to research the inducement of earnings management and it will let us understand the earnings management behavior more clearly. At the same time, it will be helpful for the supervision committee to supervise the earnings management and promote the development of the stock market.For the external inducements, the function orientation of stock markets supplies opportunities for the earnings management. So do the financing and supervising policies made by the supervision committee because the enterprises always manage earnings to attain the supervising requests. At the same time, accounting policies and dependent certified public accountants supply opportunities for the earnings management of listed companies. For the internal inducements, incomplete corporation governance induced by the specific ownership structure in our country also supplies opportunity of earnings management, so this thesis will incorporate the ownership structure to the analysis of influence mechanism of corporate governance and earnings management.In the empirical research, we use probit grouping method to analyze the relationship between ownership structure and the loss-avoiding earnings management on the basis of examining earnings distributions of listed companies in 2004 and 2003. The empirical result indicates that the proportion of state shares and the equity concentration ratio is positively related to the possibility of loss-avoiding earnings management, however,the relation between the equity restriction ratio and the proportion of circulating shares and earnings management is not significant. So the empirical research further improves the influence on the earnings management of listed companies by ownership structure.