Analysis of Listed Firms Earning Management Based on Bank Monitoring

This paper analyzes the bank monitoring of listed firms' earning management by game theory,and then it establishes the models of one-stage game and multistage games,which are based on monitoring interaction between the bank and listed firms.Results show that it is impossible to eliminate the phenomena of listed firms' earning management under current economic system;some major factors including monitoring cost,monitoring efficiency and mortgage value are also discussed;banks can enhance its monitoring efficiency and reduce the degree of listed firms' earning management by increasing punishment for listed firms' earning management,improving its corporate governance and ameliorating relationship banking between the bank and listed firms.