Stock Repurchase?Earnings Management And Market Reaction:Based On The Evidence From Case Studies

Stock repurchase works as a means of capital operation in the financial,should make a balance between shareholders,between shareholders and company,protect the lawful rights and interests of the minority shareholders,but there are some stock repurchase that have earnings management behavior before repurchase announcement,that will make negative lower profits,let the vast number of people have the illusion of poor management of the company,someone may purchase the stock at lower price,and then tell people,the company will stock repurchase to enhance the confidence of the people,make a small profit sources to make profits,this is not conducive to the healthy development of stock market in our country,and even harm the interests of small and medium shareholders.So if the investors can timely find the earnings management in enterprise accounting report,make a rational judgment,accurate decision-making to influence the price of the stock,that is advantageous to the supervision department of the securities information disclosure implement effective investigation and supervision and is beneficial to perfecting the relevant laws,standardize the healthy development of the securities industry.This paper regard stock repurchase as the breakthrough point,through the review of some theoretical basis,such as stock repurchase motivations about hypothesis,stock repurchase market reaction,the relationship between share repurchase and earnings management.According to the company whether repurchase stock or not,stock repurchase is divided into"false repurchase" and "real repurchase".Produced in both cases,on the one hand is due to people for the decision-making on repurchase lack of rational judgment,the understanding of stock repurchase also only stay in the company stock price is undervalued "shallow level;On the other hand is due to the timing of the stock repurchase allows enterprises to choose its own,when people blindly coax high stock price after the reaction,the enterprise is likely to give up the implementation of the buyback.According to the company before and after the stock repurchase of earnings management behavior,and respectively from "accrued earnings management" and "real earnings management" two aspects are studied,through the earnings management model for data analysis,according to the real and accrued earnings management value,determine the company earnings management.Issued after the stock repurchase announcement,although the company shares are improved in the short term,but from the long-term market reaction,the reaction of the true and false repurchase is completely different.So it will be helpful for surplus management of share repurchase,this paper selected the "false repurchase" and "real repurchase" two cases,the numerical analysis of two cases of surplus management,analyze the market reaction after the stock repurchase,found the surplus management of share repurchase and the difference between the real stock repurchase,help people to recognize,in order to improve the system to contribute their meager strength.