The paper on securities investment is about 5000 words 1 the value correlation between securities investment income and earnings management.
Abstract: With the continuous development and improvement of China's securities market, securities income has gradually become an important economic source for most enterprises. After the implementation of the new accounting standards in China, it is necessary to study the value correlation and earnings management of securities investment income in order to promote the improvement of securities investment income, standardize the securities market and promote the development of economic level. This paper analyzes the general situation of securities investment, theoretically analyzes and assumes the value correlation between securities investment income and earnings management, and designs and analyzes its research results to provide relevant basis for securities investment income and earnings management.
Keywords: securities investment benefit; Value; Relevance; earnings management
After more than ten years' rapid development, the number and quality of listed companies in China have been gradually improved. Listed companies are the subjects, subjects and participants of securities market investment. Listed companies usually participate in the securities market to obtain short-term investment income. At present, there are many listed companies in China, and their quality has been significantly improved. By analyzing the value correlation of securities investment income and studying earnings management, we can effectively promote the sustainable development of China's securities market and improve the economic benefits of listed companies.
1 Overview of securities investment
After the implementation of the new accounting standards in China, fair value measurement should be adopted in the process of securities investment. Enterprises need to analyze their own business characteristics and comprehensively consider securities investment in combination with risk management requirements. Financial assets acquired by enterprises need to be classified at initial recognition: financial assets measured at fair value and whose changes are included in current profits and losses; Held-to-maturity investment; Specialized in selling financial assets; Loans and receivables.
In order to obtain short-term benefits, the securities investment of listed companies mainly focuses on financial assets measured at fair value and financial assets for sale. When they are sold directly, the gains and losses will be directly included in the investment income. This kind of securities investment income includes realized income and unrealized income. In securities investment, the double-confirmed income model is adopted, and listed companies can choose the income of securities investment by selling financial assets [1]. Securities investment income has the following characteristics: first, independence. The securities investment of listed companies is independent of other operating assets, and its income has nothing to do with the operating ability of listed companies, but it is closely related to the stock market. Second, volatility.
The return on securities investment of listed companies is unstable and unsustainable. In addition, predictability. An active financial market will promote securities investment. By analyzing the financial assets of listed companies, investors can evaluate the return on securities investment. These characteristics lead to the difference between the reaction order of securities investment to stock price and the operating profit of enterprises. In the securities investment income, we can confirm the income through two methods, understand the pricing characteristics and effectiveness of the securities market, and deeply understand the advantages and disadvantages of the two confirmation methods [2].
The characteristics of securities investment income may make its reaction on the stock price quite different from the operating profit of the enterprise, and the two confirmation modes of securities investment income may make the two parts of securities investment income have different earnings management conditions. The research on the value correlation and earnings management of securities investment income is helpful to understand the effectiveness and pricing characteristics of China's securities market and the information quality (correlation, reliability and timeliness) of securities investment income, and further understand the advantages and disadvantages of the two modes of securities investment income recognition, thus providing theoretical and empirical support for the controversial fair value recognition profit and loss mode under the financial crisis.
2 theoretical analysis and assumptions
According to the analysis of accounting theory, income can be divided into temporary income and permanent income, the latter is sustainable and stable; The former is one-off and unstable. The role of permanent surplus in valuation is obviously higher than that of temporary surplus. The operating profit of an enterprise is usually a permanent surplus, and the income from securities investment is a temporary surplus. According to theoretical analysis, the value correlation of securities investment income will be lower than operating profit, and the value multiplier will be significantly lower than operating profit in the valuation model. In the actual capital market, the surplus reaction coefficient will be obviously different from the theory, but it can be reasonably expected according to the theoretical analysis. Compared with the value multiplier of securities investment income, its residual reaction coefficient will be significantly larger.
According to theoretical analysis and research, we can put forward relevant assumptions: compared with the reaction coefficient of operating profit surplus, the value multiplier of securities investment income is relatively low; Gains and losses from changes in fair value can improve the relevance of accounting earnings information. Compared with the realized securities investment income, the unrealized securities investment income has more incremental value correlation. Securities investment income information lacks timeliness and has little to do with the stock price changes in the annual report information interval; Earnings management exists in realized securities investment income, while gains and losses from changes in fair value do not exist.
3 Research design
3. 1 sample data source
The securities investment income in this study includes unrealized securities investment income and direct income from the sale of financial assets. The data sources of the two are different. The former is calculated from the investment income items in the annual reports of listed companies. The latter is calculated from the profit and loss of changes in fair value in the income statement of the annual report.
3.2 Model design
Design the model according to the above four assumptions, of which the first two assumptions need to be demonstrated according to the price model, the third assumption needs to be demonstrated through the rate of return model, and the last assumption needs to be demonstrated through the earnings management model.
3.2. 1 price model
Through the study of relevant information, according to the opinions and suggestions of previous experts, and combined with the actual situation of this study, the price model is designed. Net assets = intercept period+reciprocal of capital cost? Operating profit per share after tax+1? Temporary surplus of securities investment income+independent variable coefficient? (Net assets per share-gains and losses from changes in fair value)+error item. It proves the hypothesis 1. In Hypothesis 2, it is demonstrated that it is necessary to increase the gains and losses from changes in the fair value of securities investment in the appeal model, and the explanatory variables are based on net assets per share. And analyze whether there is value correlation in the gains and losses of fair value changes, so as to increase the explanatory power of the model.
3.2.2 Rate of return model
When designing this model, we should comprehensively consider the influence of accounting earnings on stock price changes in a certain period. Moreover, in a certain period of time, the accounting information is explored to analyze its impact on stock prices. According to the predictable characteristics of securities investment income, there may be an early reaction in the securities market. In this model, there is no same value association as the value model. The model formula is cumulative monthly return = intercept term+independent variable coefficient (after-tax operating profit/closing price per share)+independent variable coefficient (after-tax realized securities investment income/closing price per share)+independent variable coefficient (after-tax unrealized securities investment income/closing price per share)-error term.
3.2.3 Earnings management mode
According to the motivation of earnings management, this paper analyzes the earnings management of securities investment income, aiming at designing a earnings management model, and analyzing and studying its effective contract view and asymmetric information view. The model formula is: percentage of realized securities investment income to total profit = intercept term+independent variable coefficient? Refinancing variable+independent variable coefficient? Turn losses into variables+independent variable coefficient? Operating profit growth rate+independent variable coefficient? Scale variable+independent variable coefficient? Percentage of financial assets to total assets+independent variable coefficient? Industry variable+error term.
4 Result analysis
4. 1 descriptive statistics
Analyze the variables of the model and calculate the description of each sample in order to evaluate it. Most listed companies will choose appropriate profit taking for the purpose of increasing the total profit of the year. Or classify financial assets as available-for-sale financial assets that do not affect profits and losses.
4.2 Model result analysis
In China's model, unrealized securities investment income is added to explain the model. In the model of price and yield, the return of securities investment will affect the timeliness of stock price. As the income of securities investment is predictable and not timely, the stock price is reported in the information area of the annual report.
5 conclusion
In the process of rapid development of modern economy, most listed companies pay more and more attention to the income from securities investment, which is also one of the economic sources of enterprises. In the earnings management of enterprises, we should attach importance to the value correlation analysis of securities investment income and fully understand the relationship between them, so as to provide a favorable basis for improving the economic benefits of enterprises [3]. According to the evaluation results, China's securities market can distinguish between securities investment income and operating profit, and give different valuations according to their importance. According to the actual site selection before the sale, listed companies conduct earnings management on realized securities. The return of securities investment is related to value and has no timeliness [4]. Securities investment mainly uses gains and losses from changes in fair value, which can significantly improve the relevance of accounting information and avoid earnings management. After the implementation of the new accounting standards, the fair value measurement model of China's securities investment can make a big breakthrough in the historical cost measurement model [5]. By analyzing the value correlation of securities investment income and understanding its earnings management, we can provide relevant contents for securities investment income and promote the sustainable development of securities market.
References:
[1] Wu Zhanchi. Research on Earnings Management of Securities Investment? Empirical evidence of China stock market [J]. Economic Jingwei, 20 13,19 (02):193-194.
[2], Lu, Shan Hongwei. Research on the Motivation, Means and Function of Non-recurring Profit and Loss Earnings Management? Empirical evidence from China Shanghai Stock Exchange [J]. Managing the World, 20 13,17 (02):127-128.
[3] Wu Zhanchi, Luo Shaode, Wang Wei, et al. Research on the value correlation between securities investment income and earnings management [J]. Accounting Research, 20 13,19 (09):121-1.
[4] Shi Lei, Zhang Jiayu. Research on the value correlation between securities investment income and earnings management [J]. Finance and Economics, 2013,23 (12):138-139.
[5] Wu Zhanchi, Luo Shaode, Wang Wei. Research on the value correlation between securities investment income and earnings management [J]. Accounting Research, 20 13,19 (09):121-122.
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