1、 1 Earnings management, earnings and earnings manipulation Quality Evaluation Abstract In this paper, earnings management and earnings manipulation the described relationship between the Analysis of earnings quality, accounting quality, and profitability, revealed a surplus of quality in accounting
2、information systems in place given the level of earnings quality assessment framework. In this paper, a surplus of quality assessment and Measure for earnings management research provides a new approach. 【 Key Words】 earnings management； earnings manipulation； Earnings Quality Earnings quality is th
3、e quality of accounting information systems research focus, for investors, creditors are the most relevant accounting information. However, the current study are mostly from the earnings management and earnings manipulation to articulate the perspective of earnings quality issues, the academic commu
4、nity for their evaluation criteria and measure variables have not yet agreed conclusions. Previous studies are mostly from the manipulation of accruals to study the magnitude of earnings management presented in this paper to the quality score of the technical means of quantitative methods for the ea
5、rnings management research provides a new way of thinking. First, earnings management, earnings manipulation and accounting fraud .The results of earnings management affect the earnings quality, accounting quality requirement is that the accounting fraud in order to control behavior, so sort out dif
6、ferences between earnings quality and accounting quality before the first explicit earnings management, earnings and earnings manipulation of the relationship between the fraud. Whether it is a surplus of earnings management or manipulation, simply put, it means the management of the use of accounti
7、ng measures (such as the use of personal choices in the accounting judgments and views) or by taking practical steps to book a surplus of the enterprise to achieve the desired level. This pursuit of private interests with the external financial reporting process, a neutral phase-opposition. But the
8、academics believe that earnings management to a certain extent, reduce the contract cost and agency costs, a large number of empirical research also shows that investors believe that earnings have more than the information content of cash flow data. To shareholder wealth maximization as the goal of
9、the management to take some earnings management measures, we can bring positive effects to the enterprise to increase the companys value. Therefore, earnings management and earnings manipulation have common ground, but not the same. 2 Earnings management and accounting fraud are not more than accoun
10、ting-related laws and regulations to distinguish point. If confirmed by a large number of research institutes, management authority or supervision of capital markets in order to meet the requirements for earnings management to mislead investors, resulting in weakening market resource allocation func
11、tion； or intention to seek more money for dividends and earnings management, and undermines the The value of the company； or dual agency problems which are due to a surplus of management, and infringement of interests of minority shareholders. The authorities the means to manipulate earnings divided
12、 in accordance with methods of accounting policy choices of earnings management and real earnings management transactions； divided according to specific methods to manipulate accruals, line items and related-party transactions. These seemingly legal but not ethical behavior, allowing freedom of choi
13、ce of accounting policies, accounting standards, low operability, as well as emerging economies in transactions to confirm measurement, the drilling of the norms and legal loopholes, is a speculation , also in earnings management research is difficult to grasp the gray area. First try, and then trus
14、t. Earnings Manipulation actually contain the speculative earnings management and accounting fraud. Accounting fraud is a business management are being used in fabricated, forged, altered by such means as the preparation of financial statements to cover up operations and financial position to manipu
15、late the behavior of profits. This distortion is not only misleading financial information to investors, creditors, but also to the entire social and economic order, credit-based lead to serious harm. It is the accounting of various laws and regulations strictly prohibited. Accordingly, in order to
16、A representative of earnings management, B on behalf of Earnings Manipulation, C is the intersection of A and B, on behalf of speculative earnings management, then the AC is reasonable to earnings management, BC shall be accounting fraud, as shown in Figure 1. A thing is bigger for being shared. Fig
17、ure 1 earnings management, earnings manipulation, fraud surplus diagram Nightingales will not sing in a cage. Figure 1 A = earnings management； B = Earnings Manipulation； C = A Thirdly, various contracts also motivate managers to manage earnings, so(delete) under the contracting motivations, two typ
18、es of contract will be discussed, the first type is management compensation contract (Healy & Wehlen 1999, p.376). Management compensation contracts 3 are ones that provide managers incentives to act in the interest of companys shareholders. It is similar to(the same mechanism as) managers bonus sch
19、eme when companys profit falls within the range between the bogey and the cap as stated above,(.) which means(In other words), under the management compensation contract(under this kind of contracts), managers of companies(corporations) have stronger motivations to use misreporting methods and real
20、actions to manage(maintain) companys earnings upward for the sake of their earning-based bonus awards. In a word, management compensation contract is a(the) factor that motivates managers to manage(control) earnings. The second type of contract within contracting motivation is lending contract (Scot
21、t 2009, p.411). In the(delete) lending contracts, there are always covenants over the managers imposed by shareholders in order to protect the shareholders personal interest against managers actions not act in the (which doesnt seek) interests of shareholders, such as the restriction on additional b
22、orrowing, maintain the minimum amount of working capital in the firm. Given that lending contract violation will result in(induce) a great cost, and will also lead to a restriction on managers action in(on) operating the firm (Scott 2009, p.412),(.) Managers of the companies that(which are) close to
23、 violating the lending contracts have motivations to manage(hold) earnings upward(uplift) or smooth the income to assure the(all) compliances within the contracts, with the aim of reducing the possibility or delay of the violation of lending contract. Base on(On account of) the observation made by D
24、eAngelo, DeAngelo and Skinner (1994, p. 115), in the sample of 76 troubled companies, 29 of which bind lending contract used income-increasing accruals or changed accounting policy to increase companies earnings since they were close to violated(violate) the contract. All these real evidences demons
25、trated that, high costs that associate with the violation of lending contract will motivate managers to use income-increasing account to manage earnings upward. Base on(on the basis of) the above motivations, managers also can use mispricing methods, real actions and change of accounting policy to m
26、anage(preserve) earnings upward. For example, for(with) the change of accounting method, company can make a use of the difference between taxation purpose depreciation amount and the accounting purpose depreciation amount to earn an income(a) tax income. For the real actions, companies thus can alte
27、r the timing of its financial transactions, such as defer the advertising expenditures. Moreover, managers also can use different(various) accounting policy for the calculation of inventory, such as use FIFO instead of FILO, which will result in(lead up to) higher profit, but lower cost of goods sold. But(nevertheless, ) for companies that(which are) motivated to have smoothing income,
