The Influence Of Small And Medium-Sized Investor Protection Efforts On Earnings Management Of Listed Companies

At present, accompany with the rapid development of China’s capital markets, the national accounting information disclosure of listed companies is more and more strict. listed companies in China, however, due to the information disclosed in the scandal, constantly are taken charge of a section punishment by the stock certificate, and in the disclosure of information, the main problem is the presence of earnings management behavior. Listed company may reduce the quality of information disclosed to match the earnings management behavior.Manipulate earnings information will result in serious information asymmetry, and thus make the capital market allocation of resources affected, by the small and medium-sized investors at a disadvantage in the stock market, its’interests will suffer serious damage. In addition, although the legal framework for the protection of investor interests has been basically established, but there are many deficiencies compared to the west countries which the level of the investor protection developed earlier and rapid. Combined there are differences in economic, market and other aspects between the different regions of our country,so the level of protection of investors is different. In view of this, we have chosen to study earnings management of listed companies from the point of view of the small investor protection efforts.This text combines normative and empirical research, the first review and summary of related research at home and abroad as well as the basic theory, and put forward a textual assumption on this foundation. Then,the article use the level of the external environment and the quality of the listed companies’information disclosure to measure the protection efforts of the small and medium investors in China’s securities market.The article use the modified Jones model, selected the2011data of listed companies as the study sample, divides two models to test the earnings management behaviors. Empirical analysis of the results showed that:the more complete the external environment, the better the interests of small investors protection efforts, the degree of listed companies to manage earnings smaller; the better the quality of information disclosure of listed companies, the smaller of the extent of its earnings management. Finally, on the basis of the analysis of empirical conclusions, policy recommendations to improve China’s Stock Market Investor protection mechanisms are put forward.