Stock-based compensation is a “two-edged sword”: on the one hand, it can decrease agent cost and play a long-term incentive role; on the other hand, it can induce managers to manipulate information. In this paper, the authors construct a three party game model among shareholders, manager and auditor to study how to prevent the manager manipulating information. The results show that shareholders improve the technical ability and measures to punish the manager and auditor heavily when they collude to manipulate financial information, to monitor stock market more frequently and improve the efficiency of capital market, which can avoid financial information manipulation.