Earnings Management In Sanlian Hope Company's IPO Process

In order to achieve access to the capital market,the earnings managements dominated by listed company exist in the process of company's financial reporting widely,so that the operating results could meet the expectations of government regulators,external investors of financial indicators.Especially in the IPO process,in order to obtain a greater number of issued and higher issue price,earnings managements of listed companies is more obvious,in fact,the earnings management in the process of IPO is one of the important causes of the performance falters after the listing.Since January 1,2016 the listing system of IPO adds four new regulations in China,the latest system strengthens the information disclosure requirements in the original basis of specified operating income and net profit,means that the government supervision department are paying more and more attention to adopt to increase the IPO enterprise information disclosure to strengthen the protection of the interests of investors.The substantial cause of the world wild attention of the earnings management is the specific goal and the complex methods in the process of IPO.Therefore,we exploit the methods of earnings management of listed companies in the IPO process,for one thing,the research could contribute to curb the deliberate manipulation of profits,avoid accounting data falling into a digital game,for another,it will increase the knowledge and skills of government regulators,listed on the market intermediary organization and external investors to recognition the earnings management,so that to meet the specific decision of the appropriate adjustments of accounting earnings or financial reports.This paper analyzes the Sanlian Hope's financial performance deterioration after the IPO in 2014.Firstly,based on the analysis of the operating conditions,financial status and profitability,the paper finds that the Sanlian Hope appeared in net profit and operating cash flow down after listing year,there may be suspected of earnings management by reducing the expenses for the period and other means.Secondly,the Jones model of the Sanlian Hope manipulated accruals and abnormal operating cash flow,abnormal production costs,control costs of multiple anomalies linear regression analysis,founds that companies in the IPO process in accruals and real activities earnings management behavior,after the listing,is more inclined to use real earnings management behavior.Thirdly,this paper focuses on Sanlian Hope earnings management approaches,it founds that the company may take advantage of the settlement policy and revenue recognition principle manipulate income,meanwhile the relevance customer may provide the great cover in the process of earnings management.Sanlian Hope expands the scale of production to reduce the cost of production,asset impairment and engages in earnings management activities.Finally,according to the specific path of Sanlian Hope earnings management supervision,from the perspective of regulatory authorities,CPA audit and investors,this paper provides accounting information user with several references to regulate the behavior of listed companies and audit the real earnings management behavior.