Accounting Standards Orientation, Choice of Earnings Management Mode 
and Corporate Performance

Abstract

Abstract: The discretionary power which reflects accounting standards orientation provides a tool for earnings management.Due to the substitution relationship among accrual, true and classified transfer, this paper uses the sample of A-share listed companies from 2007 to 2017 to investigate the impact of accounting standards orientation on the choice of earnings management mode.It is found that under the principle oriented accounting standards, companies will give priority to classified transfer earnings management, followed by real earnings management, and finally choose accrual earnings management.Under the guidance of principle, the cost of accrual earnings management increases greatly and becomes the last choice,while classification transfer can improve the company′s future performance and become the priority choice, and real earnings management greatly damages the company′s future performance and becomes the secondary choice.Further research shows that institutional investors can effectively identify the classified transfer behavior, but not the accrual and real earnings management behavior; analysts can identify the real earnings management behavior, but not the accrual and classified transfer earnings management behavior.

Key words: accounting standards orientation, earnings management, corporate performance

SONG Fei, LIU Yi-ran, ZHOU Jia-nan. Accounting Standards Orientation, Choice of Earnings Management Mode and Corporate Performance[J]. Commercial Research.

References

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