Corporate Social Responsibility and Earnings Management of Listed Companies in Power Industry

Li Leying,Xu Xinpeng

doi:10.22158/jbtp.v8n3p76

Abstract

Due to the particularity of business operation of electric power industry enterprises, their social responsibility will have an important impact on national economic development and residents’ life. In this paper, 303 Listed Companies in the power industry from 2013 to 2018 are taken as samples to measure the degree of social responsibility of the power industry based on the contribution of the power industry enterprises to the government, employees, shareholders, creditors, suppliers and customers, and to test the correlation between the Listed Companies in the power industry and earnings management. The empirical results show that the more the power industry enterprises pay to the outside world, the lower the degree of earnings management, that is, the better the degree of social responsibility of listed companies in the power industry, the lower the degree of earnings management. Through the research results of this paper, we can think that the social responsibility behavior of power industry enterprises is “altruistic” rather than “egoistic”, which explains the importance of non-marketization of large state-owned power enterprises such as State Grid Corporation of China.

Highlights

Corporate social responsibility refers to a series of activities, such as pursuing the maximization of shareholders‟ profits, taking into account the welfare of other relevant interest groups, such as attaching importance to the working environment and welfare of employees, improving product quality and service to enhance consumers‟ rights and interests, avoiding accounting fraud such as internal transactions, and conducting charitable donation, etc
In the power industry enterprises with more social responsibilities, on the one hand, the management will be subject to more moral constraints and higher moral standards, so they will not deliberately conceal or whitewash the financial report, because this behavior is contrary to their moral standards, on the other hand, in order to fulfill their social responsibilities, the management has voluntarily given up part of the profits and the performance of social responsibility must be the result of management‟s consideration of current interests and long-term interests, so the power industry enterprises will not operate earnings for short-term interests when performing social responsibility
The regression results between the variable YEAR and the explained variable do not pass the significance test of the conventional confidence level, and the results show that the listed companies in the power industry have no significant impact on their earnings management behavior, and the long and short listing time will not affect their earnings management behavior

Summary

Original Paper

Journal of Business Theory and Practice ISSN 2372-9759 (Print) ISSN 2329-2644 (Online). Corporate Social Responsibility and Earnings Management of Listed Companies in Power Industry. Li Leying1 & Xu Xinpeng2* 1 Chongqing Power Transmission and Transformation Engineering co., ltd, Chongqing, China 2 Sichuan International Studies University, Chongqing, China * Corresponding author: Xu Xinpeng, Sichuan International Studies University, Chongqing 400031, China. Research on the identification and governance of new labor relations under the casual labor economy (KJQN202000905)

Introduction

Journal of Business Theory and Practice

Signs of earnings

Findings

Journal of Applied