Effects Of Accounts Receivable Related Party Transactions On Earnings Quality

In the competition in today’s society, rising companies large and small enterprises, survival is not their ultimate goal, in the survival continuing the steady development and expansion, is the ultimate goal of all managers. Want to get investors pay close attention to, is bound to have a beautiful financial statements. In recent years, related party transactions between the enterprise growing, and often "play" in the accounts receivable, accounts receivable has both positive effect to the enterprise, also have a negative impact. The positive influence to the enterprise generally have to promote sales and expand market share or to develop new markets, reduce inventory, reduce inventory risk and management expenses; Negative effects including influence enterprise capital turnover, the actual operation result is cover, lead to imbalance of the cash flow and accounts receivable and revenue recognition, the risk of bad debts at the same time.In this paper, I chose the three companies in the photoelectric industry, refined three companies of related transactions and the accounts receivable, the related transactions using accounts receivable turnover ratio, the ratio and the surplus cash sales cover indicators, such as several enterprises, analyses the handling of accounts receivable, accounts receivable are obtained on the quality of the enterprise surplus. Research shows that: Most of the enterprises to carry out related party transactions, the main reason is for financial statements, beautify the profits, But a lot of key trade only generated huge accounts receivable, and no cash inflows, Timely or recover the accounts receivable as soon as possible, it is the top priority of the enterprise, to avoid formation of bad debts for a long time, thereby causing loss to the enterprise, High proportion of accounts receivable, similarly also has a great negative impact on the quality of the surplus。Although surface with beautiful results, essence of the company and do not have enough cash flow, is not conducive for enterprise to continue as a going concern。In the process of enterprise related transactions, should clear link exchange risks, formulate reasonable risk prevention measures, For related party transactions of accounts receivable should be back within a prescribed period of time, if can’t take back, can the legal conditions, to sell or transfer, in order to avoid bad debts occur, affect the quality of enterprise surplus.