Research on Discretionary Accruals and Earning Management of Real Activities

- Based on Empirical Evidence on Public Traded Companies in Manufacturing Sector Lacking Profits.

In this paper,  author focused on A-share listed companies on Shanghai and Shenzhen Exchange lacking profits, analytical comparisons were made by examining discretionary accruals, abnormal cash flow, abnormal descretional expense, and abnormal production cost and comparing against a control sample. (Data from a normal operating company is used as a control sample). Author finds those profit lacking companies tends to bear with higher abonormal production costs and discretionary accurals lower than the control sample. At the lower surplus range,  their abnormal cash flow amounts, abornomal discretional expenses, abnormal production costs of those profit-lacking companies are all higher than control sample. Author therefore concludes that those profit lacking companies commonly utilized sales and expense manipulation and production cost control to achieve their pre-determined earning objectives.

Discretionary Accruals and Real activities on Earnings Management

The Empirical study on Earnings managing of listed manufacturing companies with meager profits


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谢谢2楼！！！

In this paper, the research object is the A share of china manufacturing company WEILI which listed in shanghai and Shenzhen stock exchange. Through contrast and analysis the differences of the discretionary accruals、abnormal cash flow form operation and abnormal production cost  between company WEILI and controlled sample company; find the earnings increasing range, the abnormal production costs of company WEILI are higher than the counterparts at the same level, the operational discretionary accruals of company WEILI are lower than the others at the corresponding level. In the down adjust range of the earnings, the abnormal cash flow from operation、abnormal discretionary、abnormal production cost of the company WEILI are all higher than the other companies. This verify that in the earnings increasing range the company WEILI uses production control and discretionary accruals to manage earnings. In the earnings decreasing range it uses sales control、cost control and production control to achieve the target of earnings management.

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