An Empirical Analysis Of Listed Companies Incentive Plan Impact On Earings Management

This paper describes the study of the meaning and context to explain the basic concepts, followed by literature review describes the current academic theories about the relevant equity incentive plans and earnings management, the means and motivation, and based on existing academia conclusion of the study describes the relationship between the equity incentive plan and earnings management hypothesis put forward in this paper.Cases of this article to Metersbonwer’s Group operates equity incentive plan, for example, through the implementation of equity incentive enacted during the data were analyzed to explore whether there is earnings management behavior, and then to implement the option in2006to2012after screening incentive plan companies as samples of listed companies issued equity incentive plan and implement earnings management behavior is caused by the large sample case studies and empirical test. Using the modified Jones model and the Jones model to calculate the controllability of accruals as a proxy for earnings management by the sample companies base period and the previous year’s value of the earnings management paired t test, while the controllability accruals as explanatory variables, the management equity incentive plan in the number of holdings, the subject matter of the equity incentive plan, incentive plan and equity incentive plan valid exercise price as an explanatory variable multiple regression analysis, in order to ensure the robustness of the model to join the annual use of Jones and industry dummy variables for analysis.The results of empirical research results:the implementation of equity incentive plan will not necessarily lead to earnings management behavior management; management equity incentive plan for strength, in fact, the higher the equity incentive plan exercise price, the likelihood of earnings management on lower. For the results of empirical studies put forward the corresponding solutions and recommendations, the final review of the research process deficiencies. Significance of this study is the ability to design a listed company’s equity incentive plans play a guiding role in the equity incentive plan design needs to master the subject matter, is excited by outsiders to grasp the details of the shareholding strength, government and relevant laws and regulations Monitoring is also important to ensure equity incentive good development.