| There are always many disputes on high salaries for executives of state-owned enterprises.In order to institute and perfect the incentive and restraint mechanisms of income distribution,the government has issued the salary-limit order,the salary-reform act and other documents.Compensation regulations decrease the pay-performance sensitivity.Executives’ earnings management for higher salaries is restrained,so the level of earnings management also decreases.Among these compensation regulations,the effects of the salary-limit order on earnings management have been studied frequently,but the salary-refonn act has been studied infrequently due to its late.Based on the background of the reform on executives’ salaries of state-owned enterprises,the principal-agent theory,equity theory,incentive theory,the thesis is about the reasons and methods of earnings management,and the effects of compensation regulation on earnings management.Based on the empirical data from CSMAR,there is 11,014 observations of listed companies to examine the effects of compensation regulation and the salary-reform act on earnings management.The study finds that:(1)Compared with non-state enterprises,compensation regulations restrain accrued earnings management of state-owned enterprises,especially central enterprises,but promote their real earnings management;(2)The salary-reform act restricts executives’,compensations of state-owned enterprises,especially local state-owned enterprises;(3)The salary-reform restrain accrued earnings management of state-owned enterprises,’especially local state-owned enterprises,but promote their real earnings management.Finally,this study puts forward some suggestions for the reduction of real earnings management and long-term development of state-owned enterprises in aspects of the administrative supervision,internal governance,legal environment and supervision by public opinion. |
