New Accounting Standards And Earnings Management Of Listed Companies

The increasing damage of Earnings management on the capital market and investors' interests is becoming one of the current focuses of research in the field of accounting. Local scholars have made relatively sufficient statistical research on the existence of corporate earnings management and the problem caused by the extent of such practice, but lack in-depth discussions on the function of accounting principles in earnings management activities. This paper examines earnings management mainly from the perspective of accounting principles to provide bodies that establish such principles a basis for drawing up policies for complete accounting principles. For this purpose, this paper sets up theoretical frame of the earnings management with the standard research method. Based on this theoretical frame, using case studies, this paper studies the present condition of earnings management in listed companies, analyzes the method and the formation of system in business enterprise when managing earnings, while showing the contradictory influence of accounting principles on earnings management.There are six chapters in this paper. Chapter1 is an introduction, explaining the research background, purpose and methods. The second chapter lays theoretical foundation in the successive chapters by defining the concept of earnings management and discussion on the reason and condition of earnings management created. Chapter3 explores the present condition of earnings management in China's listed companies, and by analyzing methods that earnings management adopt and reasons that it produce, confirms the guiding effect of accounting principles on earnings management. As the principal part of the paper, chapter4 discusses the contradictory effect of accounting principles on earnings management, that it is a check and supervision factor of the earnings management as well as an inducement factor. For example, the new accounting principal mentioned in the paper, it not only shrinks the develop space of corporate earnings management, but also brings up new earnings management methods. According to the above research, the paper puts forward a countermeasure to standardize earnings management in which the most important measure is bringing the accounting principle into play. And at the end, sums upsuggestions that how to improve China's accounting principles.