A Case Study Of Earnings Management In Nanjing Steel Under ST Background

As of December 31,2017,China has a total of 3,564 listed companies,including1,439 in Shanghai Stock Exchange and 2,125 in Shenzhen Stock Exchange.The limited number of listed companies and stringent listing conditions have made China's listed companies a scarce resource.China's capital market started relatively late and the supervision system of the capital market is not very sound.For the delisting of listed companies,China adopts the “ST” system.As long as the listed company adopts some earnings management methods,it can basically keep its own title of the listed company.After listed companies are dealt with by "ST," their earnings management needs will become more apparent.The examination and disclosure system of financial statements of listed companies in China is still not standardized,and the supervisory authorities do not strictly control the conditions for withdrawal from the market.They are also not very harsh on the review of cap conditions for listed companies that are listed as “ST”.This is an act of earnings management.The emergence and wide application of the conditions created.Listed companies in China that are about to withdraw from the market will be able to smoothly withdraw their caps as long as they complete the turnaround in their reporting data.This superficial turnaround has not squeezed out the "moisture" of earnings,but they must meet the deduction after they want to re-list after delisting.The net profit after “moisture” is positive and weighs the advantages and disadvantages.The management of listed companies tends to retain shell resources through earnings management.Although the vast majority of ST companies use various earnings management methods to keep their shell resources,earnings management practices After all,it can only solve the urgent problem,and it can't fundamentally solve the problems that exist in the development of enterprises.And most investors in China cannot really read the financial statements of listed companies.Listed companies can use the earnings management method to create a virtual one.Listed companies with perfect financial data appear to deceive investors.In the long run,the number of "zombie enterprises" in China's securities market has increased year by year,which has seriously affected the healthy and efficient development of the securities market.The main research method adopted in this paper is the case study method.Firstly,it introduces the related concept of earnings management theoretically,analyzes and summarizes various motives for listed companies to perform earnings management,and earnestly sums up methods or means for listed companies to perform earnings management.Then,on a theoretical basis,it looks for suspicious earnings management by *ST Nansteel.Behavior,through the comprehensive analysis of the data to identify the earnings management methods of *ST Nansteel,and finally conducted an in-depth study of the *ST Nansteel case,and analyzed how it used profit management to complete the deficit in the process of removing caps.Through research,it has been found that *ST Nangang mainly uses non-recurring gains and losses,a large amount of accrued assets impairment provision,related party transactions,and changes in accounting estimates,etc.,to adjust earnings,successfully turning losses into profits,and achieving capping.Finally,the paper explains the reasons behind the ST's earnings management in conjunction with the case and gives suggestions for controlling earnings management.