Abstract:
Real earnings management refers to business managers using real economic activities, distorting the normal business operations to manipulate the accounting profit which is widely regarded as less possibility to be detected by high quality audit. The researcher selects listed manufacturing companies from 2002 to 2004 in Shen zhen city as samples and also based on knowledge of positive accounting theory to study on the motivations of real earning management. Hope the results could also help regulators and policy maker in policy making, enactment of regulations/laws and their enforcement. The conclusion shows: the “Three hypothesis” based on positive accounting theory have a significant effect on implementing the real earning management. In addition, Certified Public Accountants Auditing quality is also significantly affects the motivation of implementing real earning management in the actual manipulation.
