Research On The Earnings Management And Its Influence Before The Amortization Of Restricted Shares

In recent years, the private placement become more and more popular with listed companies, it has become a major equity refinancing. Previous studies abroad indicate that, before directed stock issuance, the controlling shareholders of listed companies will make use of earnings management to improve the company’s short-term performance and affect the price of the additional shares, so they can achieve the purpose of transferring benefits. Then, before restricted shares of the private placement lifted, will the listed companies use earnings management to improve the company’s performance, but what will be the economic consequences?This paper uses the case study method and select the gorgeous family for the study, then begin a study on the earnings management before restricted shares of the private placement lifted and its economic consequences. The result show that the controlling shareholders of the gorgeous family will make use of earnings management before restricted shares of the private placement lifted for the purpose of maximizing the earning of restricted Shares, However, the company’s good performance due to the earnings management is temporary, and it will lead to a significant decrease of the company’s future performance and financial indicators. The study on the earnings management before restricted shares of the private placement lifted, provides a new perspective on the transferring benefits, then we can protect the interests of small investors more effectively.