Through studying companies listed in A-share market in China from 1998 to 2006, taking into consideration the impact of industry characteristics on accounting flexibility and dividing it into ten sections, we use accounting flexibility to measure the adjustment spaces of accruals, and. With T-test, we find out that the average level of earnings management of the companies with higher accounting flexibility is significantly higher than that of those with low accounting flexibility. With modeling and regression analysis, we find out that the degree of earnings management of companies with high accounting flexibility is above that of those with low accounting flexibility. The results show that the ability of earnings management is not constant and that the levels of earnings management in previous periods influence those in latter periods.