Abstract: More and more corporate finance and accounting literature has begun to focus on the application of life cycle theory of firm. Based on the indicators of life cycle developed by Dickinson (2011), combined with the sales manipulation estimated method proposed by Roychowdhury (2006), this paper firstly studies the degree of sales manipulation across different life cycle stages. Further, this paper examines whether there is difference on the economic consequences of sales manipulation across different life cycle stages. The results suggest: (1) Sales manipulation exists significant life cycle effects and shows a U-shaped distribution: the degree of sales manipulation is highest during introduction and decline periods, less during phase-out and growth periods and lowest during mature period. (2) Economic consequences of sales manipulation also exist significant life cycle effects and show U-shaped distribution: the negative effect on future performance is least significantly during introduction and decline periods, less significantly during phase-out and growth periods and most significantly during mature period. This study not only provides new evidence on determinants of sales manipulation and its economic consequences, but also has important practical implications for the mechanism of life cycle of firm.