Research On Economic Consequences Of Earnings Management In Continuous Loss Of China Listed Companies

For improving the efficiency of the allocation of resources in the capital market, supervision department based on profit and loss of strict listing qualifications index review, accordingly, to accounting profit and loss of the basis for regulation measures, induce the continuous loss of earnings management company behavior. However, the existing research did not analyze the economic consequences of earnings management properties, but focused on earnings management supervision system of inducing the role, and the supervision system of rationality as a lack of evidence.In fact, if want to make sure the rationality of the supervision system based on profit and loss of earnings management, must the economic consequences of examination by nature. If the listed company through the earnings management regulation, to keep the current bypass listed the qualification, and has good subsequent performance, then earnings management not only produced no negative economic consequences, but will improve resource allocation efficiency, and better protect the interests of investors. By contrast, if listed companies by earnings management supervision system, but subsequent around with poor performance, then explain the existing research on earnings management behavior and negative supervision system has certain rationality. The economic consequences of nature people treat surplus management attitude:if the positive economic consequences are dominant, the surplus management shall be allowed to exist, in order to improve the market efficiency, conversely, is to be stopped earnings management.In recent decades, the surplus management related topics has been foreign academia very concerned hot problems, foreign scholars has its extensive research in Chinese academic circle, and earnings management, the study of relatively late, to company earnings management problems are not cause enough attention. The existing research focused on accounting selection in the role of earnings management, ignoring the real earnings management activities, the influence of its economic consequences and not on the deep analysis of the nature of the investigation, but focus on opportunism motivation and earnings management behavior and the relationship between the ranges. Lack of empirical evidence on the premise of motivation, influenced by the "consequences"-the influence of the thinking mode, that can cause the opportunism motivation of earnings management, the researchers tend to infer that surplus management will produce negative economic consequences. However, due to the existence of the market regulator, opportunism motivation is not necessarily lead to negative economic consequences. In addition, management accounting behavior of complex, earnings management may not be a single motivation effects. Only from opportunity perspective, lead to the deviation of earnings management knowledge, considering only earnings management negative effects, and then put forward relevant Suggestions to limit or even eliminate the surplus management behavior, ignore the possible positive role.In order to more comprehensive understanding of earnings management, this article will from the economic consequences of the profit and loss Angle index retreat city supervision system as the breakthrough point, to 2002-2005 in Shenzhen on the main issue A shares of continuous loss to the sample, the surplus management of the economic consequences of the study, which inspect the our country unique profit and loss index retreat city supervision system of rationality. Research shows that, although as accounting profit and loss of the basis for regulation measures, induce the continuous loss of earnings management company, but has not produced negative behavior of the economic consequences.This paper studies the main conclusion has four aspects:first, the continuous loss of listed companies during the loss of earnings management behavior and future between putting no correlation between putting the year, and earnings management scope and profitability and avoid retreat city supervision are related. Show that continuous loss of earnings management during the loss of future turnaround don't have strong ability to explain, by contrast, was putting the company earnings management really can effectively help it to achieve profitability and avoid retreat city supervision. Second, relative to withdraw from the market is not in the scope of supervision, normal of the listed companies, to withdraw from the market in the scope of supervision for losses in the listed company of earnings management behavior putting provide value, can produce positive information related to the economic consequences. The conclusion shows that the profit and loss of retreat city index based on supervision system, although induce companies' earnings management behavior, but can not be used as the basis, the effectiveness of the negative from the point of the effect of system is implemented, and the retreat city supervision system existence has certain rationality. The third consecutive losses, the listed companies by earnings management to realize avoid putting to withdraw from the market, its earnings management supervision behaviors is not out of opportunism motivation, but the purpose of the signals. Fourth, accounting choices and real activities two different nature of the surplus management means, produce the economic consequences of a difference does not exist.This paper on our continuous loss of the listed company earnings management of the economic consequences of the conclusion of the study made major contributions to:first of all, help people more comprehensive knowledge of earnings management, surplus management is not necessarily leads to negative economic consequences under different conditions, and earnings management may have positive economic consequences. Secondly, the effects of the retreat city supervision system, the listed company for loss of earnings management of the nature of the economic consequences, make up only examine factors to trigger the previous studies and ignore the economic consequences of shortage, avoid the consequences of that according to the motivation of subjectivity. Finally, based on the profit and loss to our country index retreat city supervision system has certain rationality of the existence of provides empirical evidence.