Study on Cash Flow Manipulation and Earnings Management-Based on Empirical Evidence of China Listed Companies’ SEO
Xin Ling Zhang

Abstract
In order to obtain SEO (Secondary Equity Offering) qualification, china listed companies would do different levels of earnings management centering on accounting earnings indicators. While previous researches on earnings management are mainly focused on enterprise management authorities’ accruals manipulation. In fact, in order to avoid losses, the user of statements would pay more attention to enterprise’s cash flow when they are concerned with enterprises earnings quantity. With cash flow gradually being taken seriously, various contractual provisions will cover information about cash flow. In this paper, Jones model is used to make analysis according to industry years; the sample companies’ cash flow is divided into normal cash flow (expected cash flows) and abnormal cash flow ( unexpected cash flows); existence of earnings management behavior and management level of enterprises under China major shareholders’ control is studied by univariate analysis method, and two models’ research results are confirmed for each other; cross-section factors affecting cash flow earnings management are analyzed with multivariate regression approach.

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