The Impact Of The Reform Of Accounting Standards For New Financial Instruments On Earnings Management Of Listed Companies In China

China’s Ministry of Finance revised and issued the accounting standards for Business Enterprises No.22-recognition and measurement of financial instruments(cas22)on March 31,2017,and required Chinese enterprises listed abroad and those listed at home and abroad to implement the new standards simultaneously on January 1,2018,and other domestic listed enterprises to implement the new standards from January 1,2019.This measure aims to achieve the convergence of China’s financial instrument standards and international financial reporting standards,and better integrate into the international financial market.The regulations on the division principles of financial instruments have long attracted the general attention of experts and scholars in academic and practical circles.The focus of this reform is mainly on the division principles of financial instruments.Many studies at home and abroad have pointed out that in the old financial instrument standards before the reform,the principle of managers’ intention to classify financial assets increases the space of earnings management and provides an opportunity for enterprises to improve or smooth profits.Academia has carried out rich research on the ways and motives of earnings management,and the new standards after the reform have greatly compressed the space that can be divided according to the intention of managers.What is the impact of this measure on earnings management of listed companies? From the perspective of internal and external supervision,what is the impact on earnings management of enterprises with different levels of internal control and different concerns of analysts? These problems are worthy of our study.Therefore,this paper decides to study the impact of the implementation of the new standards on enterprise earnings management under the background of the reform of accounting standards for new financial instruments by combining theoretical analysis,literature research and empirical research.Firstly,based on the agent theory and externality theory,this paper puts forward the research hypothesis of the main effect on the basis of theoretical analysis,and from the perspective of internal and external supervision,the internal supervision is measured by the level of internal control and the external supervision is measured by the attention of analysts.Secondly,in terms of selecting research samples,according to the fact that domestic and foreign enterprises listed at the same time began to implement the new standards from January 1,2018,this paper selects the research samples of Shanghai and Shenzhen A-share listed enterprises from 2016 to2020,constructs a diversified regression model and makes an empirical analysis.Finally,it summarizes the research conclusions of this paper,puts forward management enlightenment,and makes further prospects for future research.This paper enriches the research content of the new financial instrument standards and enterprise earnings management,deepens the research on the internal and external supervision of enterprises,provides useful reference value for the implementation and optimization of the new standards,and finally realizes the sustainable and high-quality development of enterprises.At the same time,it also keeps the benign development of China’s financial market.The empirical results show that: first,the implementation of the new financial instrument standards will not significantly reduce the degree of accrued earnings management,but significantly improve the degree of real earnings management.Second,the level of internal control plays a negative role in the implementation of the new standards and the level of accrued earnings management,and plays a positive role in the implementation of the new standards and the level of real earnings management.Third,analysts pay attention to playing a negative regulatory role in the implementation of the new standards and the level of accrued earnings management,and playing a positive regulatory role in the implementation of the new standards and the level of real earnings management.Based on the research results,this paper puts forward the following suggestions: first,the deterrence of China’s laws and regulations can not achieve the effect of standardizing enterprise behavior,so improve the relevant laws and regulations,clarify the illegal responsibilities of enterprise management,ensure the implementation of relevant disclosure systems,and increase the punishment of personnel and enterprises involved in real earnings manipulation.Second,for the existing internal control defects,enterprises should formulate feasible repair plans in time and accurately,strengthen the supervision of internal control processes,and ensure the improvement of internal control quality.Third,the analysts in this paper are concerned about stimulating enterprises to carry out more real earnings management activities,and the product market competition enhances the above "pressure effect",which also shows that securities analysts are lack of ability and experience,are not sensitive to the manipulation of enterprises’ real business activities such as expanding production,price reduction and promotion,advertising and publicity,and can not find the real earnings management behavior of enterprises,As a result,the management increases the degree of real earnings management in order to achieve the analyst’s earnings forecast.