ST Fu Gang Earnings Management Research

Earnings management essentially violates the principle of neutrality,deviates from the core idea of modern financial reporting,and affects the quality of accounting information in financial reporting.With the development of capital market,earnings management as an asset management method has been popularized in listed companies.However,excessive earnings management not only interupts with the assessment of stakeholders,but also leads to the distortion of accounting information and disturbs the stability of market economy.ST system is a unique system in China.After the implementation of the strictest delisting regulation in 2018,strict delisting has become the main tone of supervision.However,after several reforms,the framework and indicator system of a-share delisting system have been basically formed,and the implementation mechanisms of voluntary delisting and compulsory delisting have been implemented in some cases,but the regular delisting is far from being realized.Compared with the 6% delisting rate in the United States,the delisting rate in China is less than 1% in ten cases.The reason is that the current ST system pays more attention to financial indicators,which provides space for those poorly managed enterprises to "protect their shell".Specifically,enterprises can avoid the current delisting standard by modulating loss from asset devaluation,non-recurring gains and losses,etc.,and they can often turn around losses in the same year that ST is implemented.Therefore,there has been a group of poor management and poor financial status of listed companies in the market,they improve the earnings management methods such as non-recurring profit and loss to whitewash the performance,"shell".In view of this phenomenon,this paper selects a typical ST company ST fu steel,the core issue of the research: excessive earnings management in the process of ST fu steel removing the cap.On this basis,there are five research parts: recognition of excessive earnings management behavior of ST fu steel,what are the means,causes and economic consequences of ST fu steel's excessive earnings management? Through the analysis,the problem of how to standardize the excessive earnings management behavior of ST company from inside and outside is solved.Based on this,this paper firstly reviews the literature of earnings management,and separately sorts out the literature of ST company.Then,based on opportunistic behavior theory,contract theory and information asymmetry theory,this paper selects ST fu steel,an enterprise in the steel industry that is at the forefront of China in recent years,as the research object.This paper USES the method of literature review and case analysis,and combines the financial data of ST fu steel from 2014 to 2018,to identify its earnings management with asset impairment losses,non-recurring profits and losses,so as to remove delisting risk warning,and analyzes its earnings management motivation and economic consequences.Finally,the conclusions are made: in order to avoid being suspended from listing and the management of the company to improve compensation,the company takes advantage of loopholes in regulations and policies to carry out excessive earnings management,and takes earnings management as the main way to take off the hat.This phenomenon is also a common problem of ST companies.However,the financial situation and stock value of the enterprise have not been improved correspondingly after the successful removal of the cap,which also has a negative impact on the stakeholders.Through the analysis of the earnings management of this case,the paper finally puts forward advice on the corporate governance of ST fu steel,the improvement of ST system,the supervision of the market and the investors.