Review of Quantitative Finance and Accounting

, Volume 42, Issue 3, pp 571–597 | Cite as

Can media deter management from manipulating earnings? Evidence from China

  • Baolei Qi
  • Rong Yang
  • Gaoliang Tian
Original Research


This study examines the influence of media exposure on managers’ earnings management behavior using China’s publicly traded firms during 2001–2009. We find that firms with more media exposure (both negative and non-negative) manage their earnings less than firms with less media exposure. We also find that “suspect firms” (being specially treated or with refinancing plans like seasoned equity offerings or right offerings) with more media exposure engage in more accrual-based earnings management relative to other firms. These results suggest that Chinese media serve as an external monitor to the majority of firms and place excessive pressure on suspect firms. This paper contributes incrementally to the literature by emphasizing the conflicting role media exposure plays in managerial decisions in earnings management. The findings of this study have practical implications for regulators, auditors, financial analysts, as well as other information intermediaries.


Earnings management Media exposure Corporate governance 

JEL Classification




This research is supported by National Natural Science Foundation of China (71102095): Choice of earnings management and its impact on economic consequences: an analysis based on accounting flexibility. The second author is grateful for the financial support from Saunders College of Business at Rochester Institute of Technology.


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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.School of ManagementXi’an Jiaotong UniversityXi’anChina
  2. 2.E. Philip Saunders College of BusinessRochester Institute of TechnologyRochesterUSA

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