Research On Earnings Management Of NC Non-recurring Profits And Losses In East China CNC

With the continuous development of China’s capital market,the relevant departments have increasingly standardized and improved the management of listed companies and delisting.*ST,as a unique delisting system in China,warns companies to improve their own operating conditions on the one hand,and reminds investors to pay attention to the company’s operating risks on the other hand.*ST company’s capping system has always been an important part of the Securities Exchange System and the Securities Exchange Securities Exchange System of China Securities Regulatory Commission.However,due to the lack of some index restrictions,there are huge loopholes in the relevant systems of non-recurring profit and loss items.Therefore,listed companies have used earnings management to whitewash their operating results.If *ST companies are forced to delist,the threshold for re-entry will be more stringent;if only "delisting risk warning" is applied,the company’s net profit will remain positive in the third year after the warning,then delisting can be avoided.The policy of "delisting risk warning" is different,which makes many companies put earnings management in the first place,among which the project control of non-recurring gains and losses is the most convenient.However,from the perspective of profitability,earnings management has not fundamentally changed the state of business.On the one hand,this kind of earnings management will not fundamentally change the company’s operating conditions.It will produce low-quality capital and affect the operation efficiency and healthy development of the capital market;on the other hand,the earnings management statements to a certain extent play a misleading role in investors ’decision-making,affecting scientific decision-making.This paper mainly uses literature research method,case analysis method,comparative analysis method and normative research method.Before the analysis of specific cases,the background,significance and methods of this paper are elaborated;the literature on non-recurring profit and loss earnings items at home and abroad is studied,the current research situation in relevant fields is understood,and the researchresults are summarized;through the theoretical analysis of relevant concepts such as non-recurring profit and loss,earnings management,and earnings management of non-recurring profit and loss items,accounting is considered.Persistence is the premise of earnings management.On the basis of theoretical analysis,this paper introduces the industry background and financial situation of East China CNC Company by using case analysis and comparative analysis.By studying the annual financial statements of East China CNC Company in recent ten years,the case is analyzed in detail from the motivation,conditions,means and results of earnings management.Finally,it points out that the earnings management method adopted by East China CNC has not improved the actual operation of the company.Finally,using the normative research method,the author puts forward suggestions to the system maker,the earnings management subject and the public respectively.Earnings management is essentially a way to whitewash the company’s financial statements.It will not help the company’s actual operating ability.Therefore,relevant departments should improve the delisting system and the definition of non-recurring profit and loss items,and strengthen the supervision of earnings management of non-recurring profit and loss items both inside and outside listed companies.In order to improve the quality of China’s capital market,so that users of statements understand the real business situation of the company,and reduce the error rate of investment decisions.