Case Study Of Weifang Yaxing Chemical Earnings Management

Earnings management has always been the focus of discussion in the practical and academic circles.China's listed companies often use earnings management to manipulate earnings,disrupting the economic order of the capital market.In the final analysis,earnings management behavior can greatly affect the information disclosed by enterprises,so that it can not fairly reflect the real business situation of enterprises.At the same time,financial statements lose credibility,and investors can not fairly measure the true value of enterprises.From the perspective of enterprises,earnings management can temporarily improve the profitability of enterprises,but the cost is often the long-term benefits of losses,which is not conducive to the long-term development of enterprises.As far as capital market is concerned,earnings management disturbs the order of capital market,and even zombie enterprises can survive.Therefore,we should learn to identify the means of earnings managementStarting from Weifang Yaxing Chemical Co.,Ltd.,this paper makes a comprehensive analysis of Yaxing Chemical's earnings management methods by case study.Yaxing Chemistry was initially funded by foreign investors,and later,with the approval of the Shandong provincial government,a listed company of chemical products was established according to law.It mainly produces and sells chlorinated polyethylene Association(CPE,caustic soda,and ADC foaming agent).Yaxing Chemistry was warned of delisting in 2013 because of two consecutive years of losses since its listing in 2001,and was subsequently awarded ST in early 2016 because of its negative net profit in 2014 and 2015.Through the analysis,we can find that in 2013 and 2016,AsiaStar Chemicals managed to turn profits into profits through non-recurring profit and loss measures and real earnings management actions such as expanding production to get rid of the risk of suspension of listing,but it conformed to the relevant provisions of Shanghai Stock Exchange on stock listing,so AsiaStar Chemicals succeeded in picking stars.Man-made means of earnings management will threaten the normal operation of the capital market.This paper will comprehensively analyze the operation and management methods of Asiang Chemistry in 2016 to provide analysis ideas for information users,so as to better identify the earnings management behavior of enterprises in order to identify the real earnings situation of enterprises.Finally,the paper puts forward some suggestions to improve the current earnings management from the five perspectives of ownership structure,delisting system,internal control,information disclosure and government support.