Analysis Of Earnings Management And Earnings Quality Of The St-listed Company In China

The organization which its goal is to get profits always concerns quantity of earnings and quality of earnings. However, the earnings management will seriously distort the information of quantity of earnings and quality of earnings. Being regulated by rules of law and statue, a listed company has responsibility to come out with its financial statements. So, compared with other type of profits organization, it is meaningful to learn the information of quantity of earnings and quality of earnings by analyzing the listed company's financial statements.This paper will focus on three aspects known as configuration of earning, ability of generating cash and persistence of getting earning. We choose the samples defined as Special Treated (ST) listed company from Chinese stock market of 2006.The reason why choose the ST listed company as research sample is the those listed companies have the emotion to implement earnings management for keeping the qualification. The analysis result shows that ST listed companies universally have bad earning quality. At the same time, almost every listed company has earnings management. Through adjusting non-current terms such as profit and loss of selling assets, subsidy and switching back assets depreciation preparation, ST listed companies always can have positive retained profits. But those positive retained profits are not true positive retained profits.According to the research result, it suggests that law should be emended, and supervision action should be strengthened. Only in this way, the information quality of earning can be improved.