Research On Earnings Management Of Equity Refinancing In Chinese Listed Companies

In academic circle, earnings management is a study object with a long history, and though scholars and competent authorities have studied earnings management for a long time, it's still a popular and sensitive issue. Capital market is turning more and more active, and we can sense that earnings management have a great influence on market. Large amount of studies confirm that there is high relationship between accounting earning reports and security prices, for accounting earning reports can impact directly or indirectly the listed companies, so as to affect securities prices. In the near few years Chinese security market is changeable and unfathomable. America's subprime mortgage crisis in 2008 triggered global economic crisis, in which Chinese listed companies do not luckily escaped and expose their deficiencies, confusing the authorities and stock investors. The future of Chinese economy is not clear, and that how to operate of listed companies supporting Chinese economic lifelines becomes our focus. For most listed companies, their target is to realize maximum of corporate value, and under such tough market environment they need to raise more fund to expand corporate size for survival. In current corporate equity division, corporate governance is in disorder and external regulatory power is not strong enough, resulting that many listed companies make use of earnings management to meet requirements of corporate refinancing to successfully raise social money. In the process realistic company performance cannot meet requirements of refinancing, triggering that many listed companies take the weapon of earnings management to modify company accounts to meet their target. The practical demand for refinancing directly leads to the action of earnings management.This paper will take equity refinancing of listed companies as research priority, analyze problems and causes of current earnings management of Chinese listed companies, put forward policy proposals combining current special national conditions and according to adverse impact of earning management on companies and capital market, so at to promote healthy and steady corporate development which could bring forward benign context and atmosphere.