| In china equity incentive is not well developed, It is commonly believed that Equity incentive can arouse the enthusiasm of executives, and it also able to convergence of interests between managers and owners. Equity incentive is generally considered played an important role in the market economy. However, in the implementation of the initial stage of China,whether the effect of equity incentive imagination is so effective? Since there are many problems such as information asymmetry, the criteria is not complete, as well as rational human behavior factors, equity incentive sometimes not be able to achieve a positive active role, but will damage the long-term interests of the company.Earnings management is based on the adverse consequences from equity incentive. This article do the research base on equity incentives and earnings management from both theoretical and empirical.this article select the small board listed companies in China business as a research object, corporate equity incentive small plates on earnings management.In this paper,413 enterprise were be chose as sample and those enterprise which already planed equity incentive chose as sub-samples.then we analyze those sample from implementation of equity incentive respectively and implementation efforts, and the implementation of long analysis.Finally concluded that (1) in SME board, those declared the equity incentive plan’s earnings management significantly higher than that those didn’t declared the incentive plan (2) in the company’s which already declared equity incentive plan,he incentive more higher, the earnings management degree is more higher. (3) in the company’s incentive plan to implement them, encourage longer, but the extent of their earnings management are lower.This means that the implementation of equity incentive indeed have a positive impact on earnings,but at the same time companies can also extend the length of time the equity incentive to reduce the degree of earnings management. |
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