A Case Study On The Impact Of Earnings Management By Assets Impairment Standards

Asset impairment provisions of enterprises should truthfully provision and reversal of impairment of assets, to reflect the true value of the company’s business development and the status of enterprise assets, ensure the financial accounting information released is objective and true. With the rapid development of economy and the market system is not perfect and other factors, enterprises in order to maintain their profits or avoid some risks, internal managers manipulate earnings management phenomenon is more and more obvious, the consequences will be for the company’s development plan, breaking the laws of the market, the macro is not conducive to the whole society stability. Because the rules of the relevant provisions arevague, managers tend to adjust the assets impairment and reversal of the earnings management, because assets(especially current assets) impairment reversal largely by the control of human, which has very strong subjectivity. This paper is aimed at the unreasonable phenomenon of earnings management, through the analysis of research conclusion: due to the development of strict guidelines for impairment of assets should as soon as possible to curb the behavior of earnings management, which is not inflated assets and profits, estimated liabilities nor too low, should make full force to guarantee the accounting information true and reliable enough.In order to curb listing Corporation constantly adjust the provision and reversal of assets impairment to earnings management, the Ministry of Finance issued the "accounting standards for Enterprises No. eighth- impairment of assets", the criteria of identification, measurement of the recoverable amount of assets impairment, impairment of goodwill etc.. Although the standards are effectively reduced the earnings management chaos, but the criterion itself has limitations that need to be improved, so the earnings management still has its living space.In this paper, we use the method of case analysis, literature search, objective qualitative analysis and so on. The main research analysis of the asset impairment provision and reversal of the effect on profits, and this impairment preparation will be the business management authority improper use of earnings management, continuous coloring financial reporting and foreign accounting information to such as inflated corporate profits. Began to study related theory, and analysis compared in standards promulgated and implemented before and after the provision and reversal of contrast; again, whereby Huaxin Cement Co., Ltd. as a case for analysis and discussion, the integration in recent years to the year-end audit report financial information, introduces the Huaxin Cement Co., Ltd. in 2010 to 2015 years profit table, schedule of all kinds of assets, asset impairment schedules and other information, and synthesis of fixed asset impairment preparation, accounts receivable bad debt preparation, the decline in value of inventory preparation and the reversal of net analysis and their behavior of earnings management produced deep influence. In the end, as far as possible, put forward the suggestions of pertinence, system and science. Through the practical case study. Finally, I hope that through the angle of Huaxin Cement Co., Ltd. case to find out the universal application of the proposed scheme: perfect standard system, strengthen the audit management, improve accounting and auditing practitioners of the professional level and moral accomplishment, gradually curb earnings management behavior, promote "healthy" the provision and reversal, promote social stability and the national economy healthy and orderly.