Analysis of the earnings management methods of China's electric power companies based on modified Jones model

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Authors

  • Zhibin Liu
     ,CN
  • Nian Xie
     ,CN
  • Xiaoning Li
     ,CN

DOI:

https://doi.org/10.18311/ijprvd/2021/28067

Keywords:

Listed companies in electric power industry, earnings management methods, modified Jones model

Abstract

With the constant revision of accounting standards, the earnings management methods are constantly changed and innovated in order to achieve the purpose of beautifying the statements and manipulating profits. This paper took the electricity listed companies as the research object, selected the financial data of 52 listed companies in the Shanghai Stock Exchange and the Shenzhen Stock Exchange from 2014 to 2016 as the sample, and employed the SPSS statistics software to analyze the earnings management methods of the listed companies in the electric power industry and to draw the conclusions through empirical research. Based on the preliminary statistical analysis of the earnings management methods of listed companies in the electric power industry, this paper used the modified Jones model to verify the empirical analysis. The main conclusions of this paper are as follows: There is a positive linear relationship between fixed assets management, assets impairment management and discretional accruals of the listed companies in the electric power industry. The degree of its influence is more obvious and stable than that of other earnings management methods, and passed the significance test. The collinear diagnostics can also prove a more reasonable correlation among the variables, indicating that the results obtained from the modified Jones model is more significant.

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Published

2021-07-02

How to Cite

Liu, Z., Xie, N., & Li, X. (2021). Analysis of the earnings management methods of China’s electric power companies based on modified Jones model. Indian Journal of Power and River Valley Development, 71(5&6), 82–90. https://doi.org/10.18311/ijprvd/2021/28067

Issue

Volume 71. Issue 5&6, May-June 2021

Section

Articles
Received 2021-07-02
Accepted 2021-07-02
Published 2021-07-02

 

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