Real Earnings Management?Investor Relations Management And Cost Of Equity

Because the modern company,there exists in the separation of two rights management system,the contradiction between egoism principle and the owner of the regulatory requirements in the management to control statements to meet the owner of the enterprise,the formulation of the objectives of management,this will produce earnings management.There are two ways of earnings management: real earnings management and accrual project earnings management.The former is specifically for the management of capital market motivation,motivation,motivation and other occupation prospects of contract,the financial report of the earnings of the modified by sales management,production control,manipulation of discretionary expenditure means.The latter refers to the purpose of controlling the accounting surplus disclosed by the management of the accounting policy and the choice of accounting methods.In order to ensure true and reliable financial reporting in order to protect outside investors act after AUX,the enterprise is able to manipulate the profit space is greatly reduced,but the control space project earnings management of small,high cost,more easily found,so seriously than management,use scope has been increasingly restricted.Enterprise management is also more and more tend to adopt real earnings management.The accounting information carried by the financial report plays a very important role in the capital market,and it is the basis for the external investors to make a decision.If the management performs earnings manipulation,it will not guarantee the objective and impartial financial information disclosed.The degree of information asymmetry between internal and external investors will increase,which is bound to have a negative impact on external investors.Shareholders as investors who provide equity funds for enterprises will face increased investment risk,so shareholders will ask for higher rate of remuneration,which will increase the cost of rights and interests of enterprises.Therefore,this paper believes that real earnings management will increase the cost of equity capitalSince the separation of two rights exist,then the other party two in the right that is entrusted to the party responsible for business owners that damage the interests of the company in order to prevent the management for their own interests,it is bound to the management supervision to curb the management of earnings manipulation,the greatest degree guarantee by the management of the preparation of financial reports neutral.In order to better play the function of supervision,business owners can set up investor relationship management,strengthen the enterprise communication with investors,real earnings management makes the management of exposure to more information sharing,increase the possibility of being discovered,thereby inhibiting the management for earnings management.Therefore,this paper argues that the strengthening of investor relationship management can weaken the impact of real earnings management on the cost of equity capital.Based on the above analysis,this paper studies the real surplus management activities and the relationship between the equity capital cost,and study the relationship between the investor relations management in the two plays This article selects the Shanghai and Shenzhen two city in 2012-2016 a-share non-financial listed company financial data,using the empirical analysis the following conclusions:(1)the real surplus management activities significant positive correlation with the equity capital cost;(2)the investor relations management activities can weaken the real activities manipulation on management positive relationship of equity capital cost,namely the investor relations management can play a regulatory role in the relationship between the two Can be seen from the above two conclusions,management of real earnings management does harm the interests of the owner,the rights and interests of the enterprise financing costs But if the owner can build investor relations management,can reduce the damage The basis of this paper,through the above research conclusion,and points out the existing problems and puts forward the countermeasures and prospects the future research direction,the listed companies is expected to pay attention to investor relations management,make its can play a role of supervision.