The Case Study Of Earnings Manipulation Of AF Under The Reduction Of Large Shareholders

Recent years,the reduction of large shareholders has appeared frequently which has caused great impact to the capital market and made the large shareholders a special focused group.The listed companies may conduct earnings manipulation to coordinate with the reduction.As the result,the quality of accounting information would be damaged greatly and disturb the investors'decision making.Therefore,disclosing the earnings manipulation under the reduction of large shareholders can help stakeholders make proper countermeasures.AF is a listed company which has kept continuous income growth since the listing.But its large shareholders reduced large amount of stock which is standardized.This article chose AF to make case study,using the agency theory,information asymmetry theory,insider trading theory and signaling theory to find out the incentives,internal control,earning manipulation measures and its outcome.The study has great theoretical and practical value.The study discovers that driven by interest,they did undertake earning manipulation and the week internal control boosted it.The usually measures consist of the confirmation of income,return or transfer of asset impairment,using non-recurring gains and losses and choose information disclosure time.These kinds of behaviors brought great benefits to large shareholder but damaged the development of the company and caused bad financial consequences.The innovation point of this article is the combination of theory with practice.Build the theory structure according to the four theories listed above and use the structure into practice which can make up the shorts of empirical study.At the same time,in the article it points out the common means which can be used in auditing work.