A Study On The Influence Of Government Subsidies On Earnings Management

In recent years,China has invested more and more moneny in clean energy,and the photovoltaic industry,as one of them,receives a huge amount of government subsidy.According to statistics,solar companies had received 48,646.15 million yuan government subsidies in 2015,while the amount of subsidy in 2016 increased to53,236.30 million yuan(A total of 20 similar listed companies).The government subsidy helped the development of the photovoltaic industry,but it also stimulated some enterprises to use government subsidies for earnings management.In this paper,the relationship between government subsidy and earnings management is studied.First of all,through literature review,this paper finds that *ST enterprises use government subsidies to conduct earnings management.However,the research mainly from the empirical method,lack of certian case study and concrete behavior analysis,so its process and mechanism is not very clear.Secondly,this paper analyzes government subsidy in different types,methods,motivations and accounting principles ways,it is suggested that enterprises can use government subsidies to carry out earnings management.Then,based on the case analysis,this paper sums up its process and influences.This part mainly focuses on the analysis of the real earnings management of the project and the real earnings management of the leasing agencies.Finally,it is concluded that enterprise use government subsidies to carry out real earnings management which has cause bad influence in stock market and enterprise itself.In 2017,the enterprise accounting standards no.16--government subsidies will be revised,which will affect enterprises using government subsidies to carry out the real earnings management.