Research On Earnings Management Behavior Detection Based On Deferred Income Tax Expense

From January 1,2007,listed enterprises in China will implement the new accounting standards system in an all-round way.In the new accounting standards,"accounting standards for Business Enterprises No.18-income tax" clearly points out that the temporary differences between the book value of accounting subjects and the actual tax base of listed enterprises will be consistent with the deferred income tax account.Because the listed company has the responsibility to disclose its financial information to its stakeholders,when there is a difference between the real operating situation and the expected results,the company will have a strong earnings management tendency.After China issued the new accounting standards,due to the differences between the tax,this provides a space for listed companies to use deferred income tax expenses for earnings management-Based on the research results of Phillips,PENEUS and Rego(2003),this paper studies whether the deferred income tax expense can be used to detect the earnings management manipulation of Listed Companies in China based on the probity model.And using the methods of descriptive statistics and regression analysis,the data from 2016 to 2018 are processed.It is found that when the quality of earnings decreases,the deferred income tax expense has a strong explanatory power in detecting whether there is earnings manipulation in order to weaken the impact of this situation,which is as effective as the accrual model in detecting whether earnings manipulation is adopted to avoid the impact of the same situation.In addition,the deferred income tax expense can also be used as a method to test whether the listed companies adopt earnings manipulation behavior or not.However,the deferred income tax expense does not have a good ability to explain the manipulation of earnings management in order to eliminate the adverse effects of profit decline,which is inconsistent with the research results of foreign scholars in recent years.The related factors leading to this result may be:in China,the renewal and implementation of income tax standards are not long enough,and most of the listed companies are not good at using deferred income tax expenses to improve earnings management behavior.The research results mainly provide evidence support and feedback information for the departments that formulate the standards to evaluate the implementation effect of the new income tax accounting standards.