Real Earnings Management And Accounting Firms’ Changes

Accounting firms provide the third reasonable and effective appraisal work for the authenticity and legitimacy of financial report from listed companies, so all areas of society are focus on their behavior, especially the change behavior of accounting firms.At present academia mainly study on the influencing factors of certified accounting firms’ changes. The existing studies have shown that the excessive earnings management of listed companies is one of the factors that affect the accounting firms’ changes. But on the earnings management of metering, most scholars choose to accrued earnings management as the object of measurement, lack of the study of real earnings management. New accounting standards for enterprises provides more ways for real earnings management, and increases the scale of the enterprise real earnings management. So the academic circles are paying more attention to the research of real earnings management.In this paper, we study the relationship between the real earnings management of listed companies and accounting firms’ changes, besides the effect of last year audit opinion and property attribute to the relationship of them. Based on the theory of audit contract and audit demand insurance hypothesis. This study discusses the motivation of the changes of accounting firms. Taking3704A-Share listed companies from2009to2013as the research sample, we use Logistic regression model for empirical research. The research results show that the higher the degree of real earnings management of listed companies, the greater the chance of certified public accountants change. Last year audit opinion and the property attribute of listed companies have no significant effect on the relationship of two topics. In this paper, in order to ensure the robustness of regression results, we study for further inspection. By measuring real earnings management with the three other ways, including abnormal operating activities cash flow, abnormal production cost and discretionary expenses, to do regression analysis, respectively. The results are in accordance with before.There are three innovation points of this paper. Firstly enrich the economic consequences of real earnings management, secondly expand the research methods of the earnings management and accounting firm change perspective, last but not least provides effective signal for investors to identify real earnings management of listed campanies.