Research On Earnings Management By Using Non-recurring Profit And Loss

Since the development from the reform and opening-up,the socialist market economy with Chinese characteristics has been continuously improved,and the capital market has been gradually liberalized.Moreover,investors would like to invest in the capital market.With the capital market opening-up continuously,there are higher requirements for public company to disclose information and improve the quality of the business information.On account of the company’s surplus indicators are one of the most important indicators which investors would pay more attention to when they analysis the financial information on the invested company.For attracting more investors,the company’s managers may operate profits by increasing numbers of some projects if their main businesses do not perform well.Make the earning indicators look well to affect investment decision of investors which is called earnings management.According to the persistence of corporate earnings,we usually divide corporate earnings into sustainable surpluses and unsustainable surpluses.The first one is recurrent profit and loss which is the most effective index to reflect the internal value of the company.The other is non-recurring profit and loss which is unusual for the company and can not reflect the true internal value of the company.Because of the characteristics of the non-recurring profit and loss,it becomes harder for regulators to make it normalize than recurrent profit and loss.Therefore,more and more listed companies always choose non-recurring profit and loss to operate earnings.Compared with net profits,if there is too much non-recurring profit and loss,the true internal value can not be reflected.Meanwhile,it will lead wrong earning information to inform the investors,sometimes even make them loss a lot.Even though,Chinese government modified accounting standards and used many ways to prevent using non-recurring profit and loss to manage earnings,more companies manage earnings by using non-recurring profit and loss.The amount of the company which uses non-recurring profit and loss to operate profits actually increased.At first,this paper will introduce the background of the case.And then,introduce the necessity and the significance of the research,theoretical significance and practical significance are included.At the same time,the paper generalizes the thoughts in writing and points out the innovation and shortages of the research.In the second place,based on carding domestic and foreign research about the research literature of non-recurring profit and loss and earnings management,and conclude the direction and content of the research,also make a comment,the significance of the paper will be found.Next,define the definition of the non-recurring profit and loss and the operate management.Meanwhile,introduce domestic and foreign definition difference among these two concepts.And then,introduce the evolution of the theory and the application of the concepts.Analyzing the method that how to use these concepts to solve problems in the reality.The foundation of this thesis is defining concepts and analyzing theories.Basing on analyzing theories,it will choose a typical company to do some research.Firstly,do financial statement analysis on Tsinghua Tong Fang,which can be concluded is Tsinghua Tong Fang using non-recurring profit and loss to manage their profits.Secondly,analyze the method that how to manage profit in detail.In the end,discuss the purpose of Tsinghua Tong Fang why they need manage profits.According to all analysis before,draw a conclusion and come up with some suggestions for managers and social supervise departments.At the end of the thesis,summarize all analysis and research,put forward some shortages and look forward to which parts need further research.