Social Insurance Payment Level And Earnings Management

The social insurance system is an important labor protection policy,but it also constitutes the operating cost of the enterprise while protecting employees.Excessive social insurance payment will not only reduce the willingness and level of insurance participation of enterprises,but also affect the quality of accounting information of enterprises.Accounting information is the basis for the healthy development of the market economy,and its accuracy affects the safety of the financial market and the effectiveness of the capital market.Earnings management is a means for managers to maximize their own interests by using accounting means and transaction arrangements to change the accounting information of enterprises.Earnings management will reduce the quality of accounting information of enterprises and directly affect the efficiency of capital markets.The impact of corporate social insurance payment on earnings management is not only related to the effectiveness of labor protection policy formulation,but also provides new ideas for audit and supervision institutions.Based on previous research on social insurance contribution and enterprise earnings management,this paper combines social insurance contribution,a labor protection policy,with enterprise earnings management for the first time,to study the impact of social insurance contribution on enterprise earnings management and analyze its impact mechanism and effect,with a view to providing theoretical basis and empirical support for the government to comprehensively and rationally determine the social insurance contribution rate and social insurance contribution base.This paper uses the detailed subject data of employee compensation payable and earnings management data in the notes to the accounting statements of non-financial listed enterprises from 2012 to 2021 to empirically analyze the impact of social insurance contributions on the level of enterprise earnings management,and further explores the impact mechanism and effect of social insurance contributions on enterprise earnings management.This paper finds that:(1)Social insurance payment enhances the degree of earnings management of enterprises,because social insurance payment increases the labor cost of enterprises but does not increase the operating income of enterprises.The reduction of enterprise profits forces enterprises to "reduce" the financial pressure of enterprises through earnings management;(2)The promotion effect of social insurance payment on the degree of earnings management of enterprises is more obvious in non-state-owned enterprises with the lower level of financialization and marketization,the stronger the relative strength of labor force,the weaker the internal and external governance level of enterprises,the lower the salary level,and the more unsaturated the employment level of the labor market;(3)Further research shows that the earnings management of enterprises under the pressure of social insurance payment is a long-term coping strategy of enterprises and damages the value of enterprises.Its negative impact is particularly obvious in enterprises that adopt real earnings management.The research results of this article prove that China should appropriately reduce the burden of social insurance contributions,which can not only increase the enthusiasm of enterprises for social insurance contributions,but also improve the effectiveness of the capital market.The research in this article enriches the relevant literature on the impact of labor protection policies on corporate earnings management in theory;In practice,it provides a theoretical basis and practical reference for the government’s reform of reducing the level of social insurance contributions.