The Study On Earnings Management Under The Equity Incentive Of Jiaozuo Wanfang Company

As a long-term salary incentive mode,equity incentive can promote the convergence of managers and shareholders' interests,and help to solve the principal-agent problem in corporate governance.It's an incentive mode commonly used in modern corporate governance.But because of the incompleteness of the contract,the asymmetry of information,incentives may adjust their financial surpluses to obtain benefits in order to achieve equity incentive performance indicators.Equity incentive may be converted into those incentives to seek profits,and the incentive effect for enterprise will be reduced or disappeared.In addition,the economic consequences of earnings management behavior caused by equity incentives may only be a short-time promotion,which may lead to deterioration of the enterprise's future financial indicators and operating performance,as well as a negative impact on the enterprise.Therefore,it is significant to study the influence of equity incentive on earnings management.Modern studies on equity incentive and earnings management usually use big data to establish models and test the impact of the equity incentive on earnings management.However,there is little research on case analysis for a specific company.Therefore,based on a specific company's individual behavior,this article studies the impact of equity incentive on earnings management behavior,in order to make stakeholders recognize the problem as soon as possible,and it is also conductive to the supervise of the market.First,the article reviews the domestic and foreign references in the research process,and introduces the relevant theories about equity incentive,earnings management and the economic consequences of earnings management.Secondly,this article introduces Jiaozuo Wanfang's equity incentive plan,elaborated the Jiaozuo Wanfang's financial background,industry background and the implementation process of the equity incentive plan,and then analyzes the financial data of Jiaozuo Wanfang and non-financial data.The application of accrual profit model proves the earnings management behavior and analyzes the economic consequences of earnings management.It finds that equity incentive stimulates corporate earnings management behavior,but the behavior of earnings management is a short-term economic performance.Finally,it is conclued that perfecting a sound equity incentive system,strengthening internal management and enhancing external supervision can weaken the stimulating effect of equity incentive on earnings management.And make the equity incentive for enterprise management play a positive incentive effect,rather than turn out to be the tool of the managers benefit.