Study on earnings management of enterprise — Based on game theory

Earnings management is studied to control accounting information for profit of enterprise in the scope of accounting principle. In the paper, the earnings management of enterprise is analyzed in view of the game theory and based on many sides´ game action including the board,managers and investors. Moreover, conclusion is drawn that the managers could choose whether they can carry out earnings management or not according to enterprise´s own business circumstances and self-interest maximization, and managers should try to reduce earnings management, focus on increasing revenue and product added value, cost control, and create more profits in essence instead of optimizing profit.