Case Study On Earnings Management Of ST Shan Mei

At present,many ST companies in China have earnings management and even financial fraud behavior,along with the domestic securities market supervision is increasingly perfect,the use of earnings management means are decreasing,management is more inclined to use lower risk,more secretive means of real earnings management to achieve turnaround.However,in most cases,excessive or even improper use of earnings management will lead to accounting information can not truly reflect the results of business operations,not only harm the interests of shareholders,so that investors make the wrong choice,and the company's management may also make wrong decisions based on untrue financial data,endangering the development of enterprises.This paper chooses ST Shan Mei as a case enterprise,on the basis of introducing the concepts and theories related to earnings management,first narrates the basic situation of ST Shan Mei and the course of "graduation",and uses a variety of earnings management identification methods,including trend analysis method,abnormal profit rejection method and special project analysis method,By analyzing the company's 2014-2016 financial data,this paper initially identifies the earnings management behavior of ST Shan Mei and further uses the earnings management measurement model to verify it,and then analyzes the earnings management means used by ST Shan Mei,and finds that the earnings management means used by the company include the disposal of assets and the utilization of related transactions.,The use of assets impairment and the use of government subsidies,combined with the financial data before and after the graduation,respectively,from the company's solvency,profitability,growth capacity of three aspects of horizontal and vertical comparative analysis to point out the economic consequences of ST Shan Mei earnings management;Finally,the paper clearly points out that the problems existing in the process of the earnings management of ST Shan Mei include the excessive attention paid by the management of the company to short-term returns,earnings management,which makes the robustness of the company's capital structure worse,the related transactions make the related parties occupy large sums of money,the impairment of assets and the return of suspected fraud,etc.Such as improving the compensation incentive system from the source to reduce the management of earnings management motivation,strengthen the role of internal supervision of the company,actively broaden the financing channels to improve the company's capital structure,as well as sound receivables authorization approval system to reduce the associated parties to occupy large amounts of funds.The purpose of the full text is to emphasize that St Shan Mei in the implementation of the Brexit risk warning after a series of earnings management behavior can not really achieve the effect of turning a profit,can not fundamentally solve the company's financial predicament,can not have a sustained positive impact on the operating conditions.It is hoped that St company will recognize this and will be committed to improving the company's real business performance rather than relying on earnings management to achieve a turnaround.