Research on the Influence of Accountants’ Human Capital Factors on Profit Manipulation Based on Data Envelopment Analysis

This study focuses on the investigation of the influence of human factors on the profit manipulation. Literature review indicated that although earning management and profit manipulation has been discussed in previous study, little study has done in the investigation of the influence of human factors. To address this issue, this study has developed a new analysis model based on the Data Envelopment Analysis (DEA) to assess the influence of human factors on profit manipulation. The innovation lies in that the education level of the accountants, the accountant number and the gender of the executors have been analyzed using the DEA to determine their influence on the profit manipulation. Empirical analysis has been carried out by the use of historical data of Hangzhou City, China. The DEA analysis results show that the profit manipulation is influenced significantly by the factors of the education level and number of the accountants. Hence, to constrain the illegal profit manipulation, it is essential to improve the education level of the accountants and control their number. The findings of this study contribute to the body of knowledge in the earning management and can be referred in the profit manipulation control.