The Open Cybernetics & Systemics Journal

2015, 9 : 845-850
Published online 2015 August 19. DOI: 10.2174/1874110X01509010845
Publisher ID: TOCSJ-9-845

Study of the Impact of Private Equity on the Listed Companies’ Earnings Management

Wei He and Yuling Liao
School of Finance and Statistics, Hunan University, Changsha, Hunan, 410006, China.

ABSTRACT

Based on the GEM 355 listed companies during the period October 2009 to December 2013, this paper provides an empirical analysis of the impact of private equity on earnings management among the GEM listed companies by introducing a modified Jones model and a multivariate linear regression model. The results suggest that Companies listed on GEM have positive earnings management behavior, But PE have not inhibitory effect on earnings management before companies listing. Improve earnings management governance, PE team building and monitoring mechanism will help to enhance the positive role of PE to earnings management.

Keywords:

Earnings management, listed companies, private equity, the GEM.