Management Of Real Estate Company Earnings

With the rapid development of China’s securities market, investors are becoming more rational. For investors, earnings information in the annual financial reports of listed companies has gradually become an important reference in making investment decisions. The real estate industry is a pillar industry of the national economy, with the characteristics of high-risk and high-yield. The real estate listed companies is an important representative of the real estate industry, so their earnings information is much more concerned by many investors. However, in the current stock market, the phenomenon of earnings management of listed companies in China is becoming more serious, real estate listed companies are no exception. Earnings management behavior of listed companies not only has an effect on the investment of investors, but also it is extremely unfavorable to the development of China’s capital market.Because the market value of listed real estate companies has a large proportion in the capital market, earnings management of the real estate listed companies has a great impact on the healthy development of capital market. It is necessary to reveal the earnings management of real estate listed companies, and come up with effective control measures, thereby protecting the development of China’s capital market.This article makes an specialized research on the behavior of earnings management in the real estate listed companies. First,the paper reviews the research status of domestic and foreign earnings management, and summarizes the concept of earnings management, characteristics, motives, means. Then it analyzes the current state of development of the real estate industry and financial accounting characteristics, thus revealing the possibility of earnings management in the real estate listed companies. And then it selects the annual financial report of86listed real estate companies as samples,using surplus distribution method to make descriptive statistics and normality test on these two indicators of earnings per share and return on net assets of the real estate listed companies, The results show that the two index values are not normally distributed, proving the existence of earnings management behavior in the real estate listed companies. After that the paper selects the modified Jones model to test the level of earnings management of real estate listed companies. In the Empirical Study on Earnings Management means of real estate listed companies, the underlying assumptions are based on the characteristics of financial accounting in the real estate industry. And it establish multiple regression model,using the level of earnings management as the dependent variable and the accounting items which may be used as independent variables. Through correlation analysis and regression analysis,the paper tests hypotheses and establish annual regression equation. Empirical studies have shown that the existence of earnings management behavior in the real estate listed companies. And inventories, asset impairment loss and non-operating income, finance costs, prepaid accounts are usually used as means of earnings management in the real estate listed companies. Finally, based on the status quo of the earnings management in the real estate listed companies, the paper puts forward some corresponding countermeasures and suggestions.