Equity Incentives From The Perspective Of Management Power And The Choice Of Accounting Policies For R&D Expenditure

In order to solve the principal-agent problem in the enterprise,the equity incentive has been widely used in the salary incentive plan of listed companies in our country.On December 31,2005,the CSRC promulgated the Measures for the Administration of Equity Incentives for ListedCompanies and the promulgated Memorandum on Matters Relating to Equity incentives,the performance evaluation index and the standard of the equity incentive plan are regulated accordingly.However,in order to make China’s accounting information international convergence,the Ministry of Finance in 2006 issued a new accounting standards,the new rules to the enterprise financial staff to determine the greater space and flexibility,such as"Accounting Standards for Business Enterprises No.6-intangible assets"from the beginning of the total cost of R&D expenditure to conditional capitalization.In view of R&D expenditure capitalization or cost of need to have a strong professional knowledge as a basis for judging and strong concealment,equity incentive company’s management will use the new R&D expenditure accounting policy choice for earnings control?Is the equity incentive plan effective in solving the agency problem or is it part of the agency problem?The theory of optimal contract and the theory of management power seem to be opposed to each other.They only explain the incentive effect of equity incentive from different angles.Based on the theory of principal-agent,the theory of effective contract and the theory of management power,this paper explores the impact of the implementation of performance-based stock option on the choice of accounting policy for enterprise R&D expenditure.We will be successful implementation of the 2010-2016 period to the performance of the stock options for the performance of the stock options for the incentive sample,the vertical comparison of stock options before and after the implementation of corporate R&D expenditure costs.On the basis of the same industry in the same industry,similar to the scale of return on net assets of more than zero,not the implementation of equity incentives and no other significant impact on corporate financial indicators.and other factors to match the control company,and then more horizontal incentive companies and Non-incentive companies were in the incentive base period,assessment of the exercise period of R&D expenditure costs.Finally,it explores the effects of incentive companies on stimulating capitalist equity incentive,external audit oversight,and institutional holdings on management power.Through the statistical examination of the sample data,(1)stock option incentive companies in the incentive base relative to the assessment of the exercise period is more likely to cost processing,the downward earnings management;(2)equity incentive program launched base period(N-1),equity incentive companies compared to non-incentive companies are more inclined to cost of R&D spending,a greater degree of cost,to carry out downward earnings management;(3)equity incentive period and exercise period(N/N+1),equity incentive companies compared to non-equity incentive companies are more inclined to capitalize R&D expenditure,the cost of smaller,the upward earnings management;(4)In the period of equity incentive,the greater the incentive intensity of the stock,the more the management will increase the cost of R&D expenditure through management power;(5)China’s accounting firm "top ten",can not weaken the management in the incentive period to use the management of the R&D expenditure to the extent of the cost;(6)Institutional investors to a certain extent,to curb the management of incentive incentives in the use of management power to R&D expenditure costs.Based on the theoretical analysis and empirical research,this paper concludes with the establishment of perfect performance evaluation index,regulates the system of enterprise information disclosure and compilation,improves the quality of external audit supervision,actively introduces institutional holdings,strengthens internal checks and balances and supervision aspects of the relevant recommendations.