Earnings management is profitmaking management behavior by accounting opportunistic behavior, used by the company executives as rational agents, who take advantage of the comparison superiority about personal information during the enterprise information disclosure and report process. On the premise of the bounded rationality, the contract is inevitably incomplete, and there are the problems of moral risk and reverse option. It is necessary to execute surveillance mechanism by contract, so as to guarantee the execution efficiency. It is noteworthy the premise that earnings management itself is carried on in optional space, which is permitted by laws and regulations. Therefore, the surveillance mechanism toward earnings management is inevitably one kind of personal safeguard mechanisms. Taking the system analysis and contract theory as analytical tools, from the perspective of positive alanalysis, this paper inspects the feasibility and system foundation of earnings management surveillance mechanism based on prestige.