盈余管理、收益和收入操纵质量评价经济与财经专业毕业设计外文翻译.doc

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 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 the 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 community 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 earnings 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 differences 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 accounting 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 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 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. Earnings management and accounting fraud are not more than accounting-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 function; 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 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 choice 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 trust.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 manipulate 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 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. Figure 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 types of contract will be discussed, the first type is management compensation contract (Healy & Wehlen 1999, p.376). Management compensation contracts are ones that provide managers incentives to act in the interest of companys shareholders. It is similar to(the same mechanism as) managers bonus scheme 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 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 (Scott 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 borrowing, 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 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 DeAngelo, 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 demonstrated 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 manage(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 alter 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, managers can choose to hoard this years profit to offset next years loss, so that with a smoothing income, companies are more likely to meet their lending covenant. Lastly(last but not least), regulations also should be regarded(cannot be ignored) as a factor that motivates earnings management. As we all know, regulations are rules and policies that used to control the conduct of people who it(they) applies to, and in business cycle, these regulations are applied to commercial entities,(.)so(accordingly,) with no doubt, managers of such entities are motivated to use(utilize) earnings management to circumvent some regulations. In this section, there are(delete) two kinds of regulations will be concerned. The first one is industry regulations (Healy & Walhen 1999, p.377). In the entire economy, many industries accounting data are regulated by such a(respective) regulations, as examples according to the statement of Healy & Walhen (1999, p. 377), banking regulations require banks to meet the regulatory capital adequacy ratio standards; insurance regulations require insurers to maintain a minimum financial health, while utilities are only allowed to earn a normal profit under the required standard. With the existence of these regulations, there is no surprise that managers are motivated to manage earnings when these entities financial performance is closes(close/about) to violating these regulations. For instance, for banks whose capital adequacy ratio are close to the minimum standard requirement and insurance companies who performed poorly, managers will have motivation to overstate its earnings, net income and equity, or even understate its loss reserves by recognizing revenue earlier, and deferring recognizing financial expenditures and tax expenses. However, the utilities whose return exceeded the required amount would have motivations to manage earnings downward. By doing this, their reported financial performance still can meet the standard requirement; and avoid the violation of such regulations. According to Collins, Shackelford and Wahlen (1995) observations of real banks, two thirds of the sample banks managed earnings upward, overstated the loan loss allowance and understated the loan loss provisions during the year with relatively low capital ratio (Collins et al 1995, cited in Healy & Wahlen 1999, p. 378). Adiel (1996, p. 228-230) also stated(claimed) that base on(in view of) the observation sample of 1294 insurers from 1980 to 1990, 1.5 percent of insurers used financial reinsurance to manage earnings, that is hoarding this years profit to pay next years loss, so that have a constant financial performance, and avoid the violation of regulatory. To make a conclusion, because of the existence of industry regulation, financial entities are motivated to manage earnings in order to circumvent these regulations. Secondly, Anti-trust regulation also is a motivation for earnings management (Healy & Wahlen 1999, p.378). Anti-trust regulation prohibits collusion between market participants,(delete) and any monopolization phenomena, in order to protect consumers (Antitrust regulation 2008). Under this definition, large companies have more possibility to be investigated by agencies for Anti-trust regulation violation, since such companies are more likely to be monopolies. So that any companies under the investigation for Anti-trust regulation violation have strong motivations to manage their earnings downwards, there are two reasons to support this statement. Firstly, agencies always rely heavily on companys accounting data to judge any Anti-trust regulation violation, secondly, the political costs associated with unfavorable Anti-trust judgment is too high, such as higher tax rate (Cahan 1992, p.80). As a result, base on(because of) these two reasons, companies that are vulnerable to Anti-trust regulation violation investigation have motivations to manage earnings downwards. Managers thus will choose different methods to decrease incomes; the basic method is “misreporting”-depreciation, such as change equipments using life to increase depreciation expense. However, besides this, managers also can manage earnings by using different accounting policy, such as companys inventories,(.) Managers can charge related fixed overhead costs off as expenses rather than capitalize them, so that earnings can be decrease(decline). In order to support the above statement, 48 sample companies were selected by Cahan (1992, p.87), which were investigated for monopoly-related investigation during the year of 1970 to 1983, base on the one tail test calculation,(.) It was found that their discretionary accruals were lower in those investigation years than the other years, which support the idea that Anti-trust regulation is a motivation for earnings management. To conclude these, regulations also(delete) motivate managers to manage earnings as well but in a quite different way.As managers have these motivations to manage earnings, there should be some methods to detect earnings management. The empirical one is by using total accruals. Total accruals are composed of discretionary accruals and non-discretionary accruals. “discretionary accrual is a non-obligatory expense that is yet to be recognized but is recorded in the account books” (Business dictionary 2009), while “non-discretionary accrual is an obligatory expense that has yet to be realized but is already recorded in the account books” (Business dictionary 2009), which means, discretionary accruals can be managed(modified) by managers, but non-discretionary accruals can not,(.) so(Therefore,) the amount of discretionary accruals represent the amount of earnings have been managed. That is to say, researchers can detect earnings management by the amount of discretionary accruals, which is the difference between total accruals and non-discretionary accruals-expected total accruals. Based on modified Jones model, total accruals equals to the sum of a1*(1/At-1), a2*(CHGREVt/At-1), a3*(PPEt/At-1), and discretionary accruals represented by error term e, where a2 and a3 are coefficients represent the sensitivity of accruals to change in PPE and revenue, A is total assets(Jones 1991, p.211). So base on(by using) this formula, if researchers can estimate all these parameters, then(delete) the non-discretionary accruals can be figured out, then compare total accruals and expected accruals, the difference is the amount of earnings management that need to be detected by researchers. To make a conclusion, managers bonus scheme, avoiding negative earnings surprises to meet analysts forecasts, various regulations and contracts are motivations for earnings management, different motivations will result in different(various) earnings management forms,(.) Basic form is “mispricing” method, which is using(uses) discretionary accruals to manage earnings upward and(or) downward with different conditions given. For example, change straight-line depreciation to declining depreciations method, increase inventory write-off can understate earnings, while defer recognition of expense, or early recognize revenues can manage earnings upward. Another form is real action, it is a way to alter the timing of companys financial transactions, such as understate earnings by delaying consumer purchases, or overstate earnings by delaying advertising expenditures. Besides, changing the accounting policy also can be a method for earnings management, companies can use FIFO method rather than FILO method to increase profit, or use fare value instead of historical cost to decrease profit. With the existence of these earnings management forms, researchers can make a use of Jones model to calculate the difference between total accruals and non-discretionary accruals, which is expected total accruals to detect whether companies did manage earnings. Reference Lists:Adiel, R. 1996. Reinsurance and the management of regulatory ratios and taxes in the propertyCasualty insurance industry. Journal of Accounting and Economics, 22 (1-3), p. 207240. Retrieved 4 Sep, 2009, from ScienceDirect.Atrill, P., Mclaney, E., Harvey, D., & Jenner, M. (2006). Accounting: an introduction. Australia, Pearson Education Australia.Business Dictionary. (2009). Discretionary Accrual. Retrieved 20 Sep, 2009, from /definition/discretionary-accrual.htmlBusiness Dictionary. (2009). Non-discretionary Accrual. Retrieved 20 Sep, 2009, from /definition/non-discretionary-accrual.htmlEarnings quality is the quality of accounting information system for the hot research for investors, creditors are the most relevant accounting information. But the current research and earnings management, surplus from the Angle of manipulation, expounded the earnings quality of its academic evaluation standard and measure variable havent consistent patterns. Previous studies from the accrued items to research the manipulative earnings management, this paper proposed by amplitude of quality score for the technical means quantitative method for surplus management research provides a new idea. The result of earnings management, and influence the earnings quality of accounting quality requirement is to control the accounting fraud, so finally earning quality and accounting quality difference, first is to clear surplus management, surplus manipulation and surplus false relationship. Whether earnings management or earnings manipulation, simply say that all means management using accounting methods (such as in accounting choices use personal judgment and view) or through efforts will take action the book s