A Case Study Of Chihongxinchu's Use Of Asset Impairment For Earnings Management

Due to the continuous improvement of the domestic capital market system,the government gradually relaxed the access policy,and the competition among listed companies became increasingly fierce.In contrast,China's relevant accounting policy formulation and disclosure system is not sound enough.In order to maximize the interests of enterprises,listed companies usually use earnings management to regulate profits and enhance their dominant position in the capital market.Assets as the core element of enterprise development,and asset impairment criteria for enterprises have great flexibility and operability.Enterprises using asset impairment for earnings management will increase the difficulty of auditing.Therefore,using asset impairment for earnings management has become an important way for enterprises to adjust profits.As the SFC strengthens its supervision and management of listed companies,attaches great importance to information disclosure of listed companies and prevents market fluctuation risks,the quality of information disclosure of enterprises has been greatly improved.Because the system construction of China's securities market still needs to be improved,there are few ways for outside investors to obtain information in the market,and they still rely mainly on the accounting information disclosed by enterprises.Accounting information has become the main way for outside investors to understand enterprises,and its objectivity and authenticity have been paid attention by the regulatory authorities and stakeholders.However,many enterprises blindly carry out earnings management for the sake of earning profits and income of enterprises,which usually leads to the distortion of accounting information,which makes the external investors and creditors unable to know the true financial situation of enterprises,and is not conducive to investors' making correct investment decisions.It also makes creditors bear more financial risks,and is not conducive to the effective implementation of enterprises by relevant regulatory departments.In this context,based on the relevant literature research and theoretical analysis at home and abroad,using case analysis,normative analysis and literature research methods,taking Chihong Zinc and Germanium as an example,a listed company in the non-ferrous metal processing industry,using the company's financial data from 2014 to 2017,the profitability of the enterprise is analyzed,and the relevant relationship model test is used to determine whether the enterprise has earnings management.The existence of rational behavior.The methods and reasons of Chihong Zinc and Germanium Earnings Management are analyzed.At the same time,it puts forward corresponding suggestions for enterprises to optimize their own development and focus on improving their performance.