Research On Earnings Management Of Listed Company Based On Top Manager’s Turnover

Earnings management and executive change is hotspot in the field of corporate governance issues. Especially in recent years executives resign tide attract s social widespread attention and academia discussion about the relationship between executives’ alteration and earnings management. This paper selects9150Chinese listed companies as sample from2008to2011to research the relationship between the executive change and earnings management, and discuss the relationship between executives change and earnings management under the following three special circumstances, including the relationship between state-owned enterprise executives alteration and earnings management, the relationship between two consecutive years of losses enterprise executives change and earnings management, the relationship between a restricted shares held enterprise executives change and earnings management.The empirical results show that, after the change of executives, succession executives usually regulate profit through earnings management. For the governmental enterprise, they don’ adopt large-scale earnings management to control profit in general cases due to political factors. But when executives change happens in this kind of enterprises, they will increase earnings management. Two consecutive years loss enterprise faced with the crisis of suspended, they have motivation of earnings management, especially when executives change happens to these enterprises, they will have a stronger desire to use earnings management to improve enterprise financial statements.There are three innovations in this paper. First, this paper explores the relationship between executives change and the earnings management from a new perspective. More important, this paper takes the state-owned enterprise factors into consideration, according to the special national conditions of China. And we can evaluate the influence of executives change in government holding enterprise on earnings management behavior, so as to put forward the proposal to the company’s management mode, and to improve the company’s economic efficiency. Second, this paper analyzes the deep motivation of the executives changes combined with the hot issues about limited sale of shares recently, namely realization motivation. Third, the paper give a comprehensive analysis of the economic consequences caused by executive change, and puts forward some feasible suggestions, so as to identify investment risk and to regulate the operation of capital market.Due to the limitation of the data acquisition, this article only use fully detailed data obtained from public channels of China’s listed companies as samples for empirical research. This may objectively narrow the scope of object of study, and make the empirical results have slightly deviation. In addition, because of the GEM is a rising star on the capital market, the new sample may be affected by the large sample. Though the sample during the period of2008-2011in the gem listed companies has a great practical significance, the results may fail to fully reflect the relationship between executive changes and earnings management. The future study should expand the effective range of samples and the quantity, and further to collect listed company data to make the empirical results more convincing.