The Control Of Atmospheric Pollution、real Earnings Management And Government Subsidies

In 2011, there occurred the sustained heavy hazy weather in China. The bad air quality attracts a lot of attention from the public and government. It also becomes the urgent problem for the regulator. Andin 2012 PM 2.5 was firstly put into the air qualitysupervision. Next the air condition protection laws were made and enacted one by one. However, the air conditiondidn’t turn better. The core of the air pollution-- the most polluting industries are under greatly pressure by the government, populace and media.As the conductor in the control of air pollution, the government will guide the companies to heal the pollution by the both encouraging and restraint ways. No matter in which way, the government will put the condition of the business into consideration. And the profits would the one of the crucial points. Under this situation, the companies may use real earnings management to avoid the press from the regulation.In this paper, we choose the dates from the listed companies which are in the polluting industries and try to figure out whether those companies will adjust their profits under the strict control from the government and laws. In consideration of the newaccountingcriterionin 2007 and the stricter control from the outside world,the accrual earning management were restrained. But the real earnings management could still be used. And it will be fit for the topic of the paper. In this paper, we try to figure out whether the most polluting companies will use real earning management to avoid the strict regulation pressure. According to the result of the regress, it turns out that those companies did use real earnings management to adjust their earning down. And the state-owned companies will adjust their earning down under the comparison of the other companies. Finally we also figure out that those companies’ earning management actually will affect the government’s decide to provide the subsidies.