Study On The Earnings Quality Based On The Corporate Life Cycle

Earnings reflect the quality of corporate earnings disclosure of reliability. For small and medium investors in the capital market to make the right investment decisions and the earnings are closely linked.Supervision of the capital market also depends on corporate earnings disclosure. Therefore, the level of earnings quality has an important impact on the operation of capital markets.There are lots of empirical research on the affecting factors of the quality of corporate earnings, but have ignored from the dynamic level of business development to analysis the changes of earnings quality. In this paper, As different operating characteristics of the life cycle of enterprises as the bridge, analyzes the strategic characteristics at different stages of the life cycle of enterprises, corporate governance and corporate performance efficiency characteristic features of different operating characteristics result in different earnings quality features, t hen draw earnings quality features are also showing cycle characteristics. Based on this, the paper 2009--2014 Shanghai and Shenzhen A shares of manufacturing companies for the study, from the perspective of corporate life cycle study period features earnings quality. In determining earnings quality, comparing the method of multiple measure earnings quality, the final choice can reflect economic factors, industry factors, institutional factors a nonlinear model JONES class model –BS model. C hose Dickinson’s combination of cash flow method to divide the corporate life cycle stages, the inflow / outflow of corporate life cycle stages in which the combination divided according to three consecutive years of net operating cash flow, investment cash flow and financing cash flows. Division of the corporate life cycle, reference is made to Gort and K lepper(1982) of the five-stage division method, the enterprise life cycle is divided into introduction, growth, maturity, and decline phase-out period. Combined with the particularity of the study, when introducing the argument to maturity as a benchmark constructed two dummies growing and phase-out period, using multiple linear regression model to test the relationship between the corporatelife cycle and Earnings Quality.The main conclusions obtained in this paper are as follows:(1) in a mature corporate earnings quality is higher than in growing businesses.(2) in a mature corporate earnings quality is higher than in the recession of the enterprise.The conclusions of this paper have some reference significance to help the majority of investors to better identify the authenticity of accounting information, and improve the level of supervision of securities markets, improve corporate disclosure of accounting regulations and accounting standards further strengthen our standardization of construction.Possible innovation of this paper is to analyze the management characteristics of different stages of development enterprises to further earnings quality characteristics of different life-cycle stages of enterprises. And the conclusions have practical significance.