Abstract:
The objective of this research is to analyze the factors that give impact on earnings management in electrical machinery and equipment manufacturing companies listed on Shanghai Stock Exchange for the period of 2014_2016. The factors in this research referred to sales growth, firm size, asymmetry information and managerial ownership. Discretionary accrual by Modified Jones Model is a proxy to measure the level of earnings management.
In this research, 19 companies are used as the samples that meet the purposive criteria. The researcher adopts multiple regression models to examine these four factors impact on earnings management.
The conclusion shows: sales growth and managerial ownership have the significant impact on earnings management, while firm size and asymmetry information do not have the significant impact on earnings management. However, sales growth, firm size, asymmetry information and managerial ownership have the simultaneously significant effect on earnings management.
