Abstract: This paper discusses managers'behaviors on profit reporting,based on the exiting manager-select and incentive mechanisms of state-owned enterprises in China.Equilibriums of game show that the selecting mechanism will make the incentive ones difficult to play its roles,and false accounts can't be stopped even manager's income are hooked on the book profit.Managers may disguise profitin order to protect their position.When low benefitin state-owned enterprises is generally recognized,they are more likely to make a cheat.

Key words: state-owned enterprise, selecting-mechanism, dynamic game of incomplete information