| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 99 === This study is aimed at examining the relation between real earnings management and the Value-relevance of Financial Statements. The empirical sample consists of the A shares companies listed on the main China’s capital markets (i.e. Shanghai Stock Exchange and Shenzen Stock Exchange) during 2000-2010. To capture real earnings management behaviors of listed firms, this study follows the approach of Roychowdhury (2006) and estimates abnormal levels of cash flows from operations, discretionary expenses, and production costs to proxy the real earnings management behaviors. Via the approach of Cohen and Zarowin (2008), this study combines these three measures into a comprehensive aggregate measure to proxy the real earnings management of listed firms.
The empirical results of this study indicate that more real earnings management makes the value-relevance of earnings decreased and the value-relevance on equity’s book value increased
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