Earnings Management and Accounting Standards of Listed Companies
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DOI: 10.25236/icepbm.2018.20
Corresponding Author
Lingtao Li
Abstract
Under the just enacted timing of the new accounting standards in China, combined with the new trend of domestic and foreign research, this paper turns attention to one of the restricting factors of earnings management - accounting standards. On the base of constructing the basic theoretical framework of earnings management, the paper studies the relationship between earnings management and accounting standards. On the one hand, accounting standards strongly restrict the occurrence of corporate earnings management behavior by formulating the accounting treatment rules of enterprise economic business. On the other hand, due to various reasons, accounting standards can not completely eliminate earnings management, and may even lead to excessive earnings management behavior. On the other hand, the earnings management behavior induces market accounting information crisis in turn, which provides a basis for the development of accounting standards. However, due to the existence of the economic consequences of accounting standards, relevant interest groups, out of their own interests, pose pressure through political means generally expressed as a lobbying pressure on stipulating accounting standards, making the accounting standards cannot be completely neutral.
Keywords
Listed Companies, Earnings Management, Accounting Standards.