Purpose/SignifanceEarnings quality is an important factor to measure the value of an enterprise. Excessive earnings management could mislead the judgment and decision of investors, and produce negative influence on the operation of enterprises. To clarify the relationship between accounting firm industry expertise and earnings management of listed companies is of great significance in protecting the rights of investor and promoting the normative development of China's audit market and capital market.

Method/process This paper takes Shanghai and Shenzhen listed companies of manufacturing industry in 2012-2015 as the research object, and makes an empirical research on the relationship between accounting firm industry expertise and earnings management of listed companies based on double perspective of accrual and real earnings management.

Result/conclusion Studies show that accounting firm industry expertise is significantly negatively correlated with the accrual and real earnings management, that is, accounting firm industry expertise could obviously inhibit earnings management behavior of listed companies. Based on this, this paper puts forward suggestions for accounting firms, listed companies and government regulators:accounting firms develop their own "dominant industries" and strive to improve their expertise; the shareholders' meeting of a listed company, according to its own industry, try its efforts to employ an accounting firm with certain professional expertise to audit; the government regulatory authorities cultivate and guide market participants to establish the concept of audit expertise, and lead China's accounting firms to take the road of professional development through policies.