The Impact Of Earnings Quality On Corporate IPO

Well-qualified listed companies have always been a powerful booster for economic development.With the increasing competition among all walks of life,more and more companies hope to expand their financing channels and obtain more reasonable resources through capital markets.Configuration,so that enterprises have a place in the tide of development.Since China officially implemented the approval system in 2003,all enterprises applying for IPO have to face the final assessment of the China Securities Regulatory Commission.The frequent earnings management incidents in recent years have also prompted the CSRC to continuously improve the IPO audit system and further strengthen the audit supervision.Strength.According to the data released by the China Securities Regulatory Commission,the number of enterprises participating in IPO audits is increasing every year,and the proportion of enterprises that are rejected by the capital market is also increasing.The reasons for being rejected are various,and the quality of earnings is among them.It has always been a key issue for the audit committee.Therefore,how to pass the "cruel" review of the CSRC is a topic that all listed companies have to consider.Since China restarted the IPO review in April 2014,there have been“unexpected” audit results.Some companies that seem to be in line with standards and are stable are not accepted,and some smaller and unknown companies have been in the process.This paper selects two more representative enterprises-Longqi Technology and Tailin Biological,based on the financial information disclosed in the prospectus of the two companies,based on the principles of comprehensive,practical,accurate and reliable.Combining the actual situation of the two companies,we selected 10 financial indicators such as non-recurring profit and loss ratio,operating profit contribution ratio,current liabilities cash flow ratio,main business income cash ratio,net profit growth rate,etc.,focusing on sustainability and safety.The cash quality and growth of the two companies analyzed the earnings quality of the two companies,and further explored the two companies' problems due to related transactions,accounts receivable ratio,R&D investment ratio and business model.Differences,finally,for these reasons that affect the quality of earnings,give relevant suggestions on the growth,independence and internal control of the company.I hope that the listed companies can improve their own earnings quality and can be used for reference through IPO audit.