Managerial Ability,Real Earnings Management And Operation Performance

Earnings management has significant impacts on the interest of shareholders and the allocation of resources on the capital markets,and it is a hot topic in the economic research field.There are a lot of Chinese and Western scholars have studied the relevant contents of earnings management,but most of those studies have focused on the accrual earnings management rather than the real earnings management.However,since the Sarbanes-Oxley Act enacted,more and more managers turned to real earnings management because accrual earnings management are constrained by the SOX.Since July 1st,2007,listed companies in China have been forced to adopted new accounting standards.The new accounting standards attach great importance to conservatism and reliability of financial information which reduces the accounting flexibility of the companies.In the meantime,the stock market is being more and more normative gradually.Taken together,these factors restricted accrual earnings management to a small area and made it more costly.Hence,accrual earnings management is reduced in companies,and more and more companies are turned to real earnings management.A few researches show that real earnings management has more severe effects on business performance,while few believe that real earnings management have positive effect on business performance.Hence,this thesis will mainly discuss the impact of real earnings management on business performance and how this impact changes with the difference of managerial ability.Firstly,this thesis explains the concepts of earnings management,real earnings management and managerial ability.Then this thesis will conduct a literature review in terms of the intention of earnings management,the consequence of real earnings management and the studies concerning managerial ability.The purpose of this part is to lay a foundation for the discussion of the effect of earnings management on business performance and the impact of managerial ability.Afterwards,this thesis assesses the effects of real earning management and managerial ability based on the empirical evidences from Chinese A-share market.In the end,combined with the results of the assessment this thesis draws a conclusion of the discussion which is that real earnings management have negative influence on business performance while high managerial ability managers can reduce such influence.Finally,this thesis put forward policy some suggestions.This thesis includes six parts:The first part is induction.This part will mainly introduce the research background and research value of this thesis and explain the main concepts as well as the research contents and measurement of this thesis.In the end,it shows the potential innovations and defects of this thesis.The second part is literature review.This part shows the research status of the motivation of earnings management,the consequence of real earnings management and the research about managerial ability.The third part is theoretical basis and hypotheses.This part firstly introduce the concerning theoretical basis.Combined with the characteristics and the motivation of earnings management,it put forward the hypotheses of this thesis.The fourth part is the design of the empirical research.This part will mainly design the main variables and the regression model as well as the measurement of real earnings management and managerial ability and the source of data.The fifth part is the assessment and analysis.It will show the descriptive statistics,the correlation analysis and the results of the regression.Moreover,this thesis will conduct a robustness test.The last part is the conclusion of this thesis and the policy advices.According to the results of the fifth part,the last part draws the conclusion of this thesis and puts forward some policy advices.