Analysis Of Earnings Management Behavior Of HK Company Based On Delisting System

The arrangement of delisting provision of Listed Companies in China plays an important role in enhancing market competitiveness and ensuring the stable development of the stock market.However,our country's delisting provision has been established for a short time and the development is not mature enough,and the scarcity of "shell resources" in China's stock market,many listed loss-making companies manipulate profits in accounting practice by utilizing the defects of the system itself and the concealment of earnings management,using various means to avoid losses to evade delisting.Inferior company that should be withdrawn occupy market quota,has greatly damaged the interests of creditors,investors and even the public,also has seriously affected the normal trading order of the capital market.In the short span of five years from February 2013 to April 2018,the stock abbreviation of HKcompany had undergone six changes.In fact,HK has been sustained losing for 13 years from the year of 2004.Companies that lose money for consecutive years linger on with it's last breath of life,can always make the dead come back to life,which like magic tricks,stirred up the nervous of inventors,also aroused strong social concern.The author compares the delisting provision in China and abroad,on this base,with HK branch as the breakthrough point,analyzed the motives,means and consequences of its earnings management,and put forward effective measures of preventing the governance.The article first to HK branch earnings management motivation are analyzed in detail.Through analysis of the background of HK case,it's concluded that its motivation of earnings management:keeping listing qualification,the reward incentive contract of the upper managers,and political cost.The second,further study of the ways HK has used to manage earnings.By analyzing the annual report of HK in 2013-2017,we find that the main means of it earnings management:Selling the inferior business assets,transferring stock right,contacting related debt and credit,using government subsidies.Finally,depth analyse the consequences of earnings management of HK.For analyse of financial index,from the three traditional angles of profitability,debt paying ability,running ability,and subdivided into 12 indicators to analyse company's financial situation.For analysis of marketing reaction,we analyse in detail the price of stock,the long-term shareholders'wealth,the benefits of small and medium investors,in order to promote listed loss-making companies to fundamentally improve their own operations.It is also hoped that it can provide reference value for the improvement of the investment behavior of small and medium-sized investors.At the same time,we can learn from the successful experience of the mature delisting system abroad to improve the development of China's capital market.