| Currently China has been implementing a special treatment system--ST system,according to which,any listed company with abnormal operation or financial status will be subjected to a delisting risk warning and a “*ST” mark will be added in front of its stock.The above can only help investors identify the stocks which have financial risks,but also warn the listed companies to improve their operation status timely.The listed companies whose stocks are marked with “*ST” will be deprived of listing temporarily,if they do not get rid of the risk timely.In consideration of the strict listing requirements for Chinese companies,the shell resources on the market become precious in particular.Therefore listed companies rack their brains to keep their listing qualification.The situation is particularly true for the listed companies subjected to delisting risk warnings,which will use earnings management methods possible to remove the *ST mark and maintain the shell before being deprived of listing temporarily.Although earnings management is allowed according to the accounting standards,excessive earnings management may bring much adverse influence.The untrue performance information delivered by companies through earnings management will mislead investors’ decision-making,which not only results in a chaotic securities market transaction order,but also harms investors’ interests.Such behavior is extremely unfavorable to the healthy development of the securities market.Under the context of the above,*ST Guangxue were used as the research object in this paper to analyze relevant financial data and announcements of *ST Guangxue in the process of handling delisting risk warnings using the earnings management theory and literature.It was found that *ST Guangxue could reach the effect of removing *ST mark and maintaining shell through implementing earnings management using such methods as provision for asset impairment,related party transactions,and divestiture of subsidiaries.At the same time,the stock market performance and operation status of *ST Guangxue after earnings management were also analyzed in this paper,where an overall evaluation of the performance of *ST Guangxue after removing the *ST marks were made.According to the final conclusion,earnings management implemented by *ST Guangxue is only a short-term behavior which cannot help companies get out of their dilemma and operation risks.At last,this paper puts forward some suggestions and countermeasures for listed companies’ earnings management based on case analysis from three aspects,i.e.,enterprises,supervisors and investors.By analyzing the realities of earnings management of listed companies in China deeply and elaborately through case analysis,this paper is aimed to guide those *ST companies to improve their operation status from a long-term development perspective,so as to reduce the speculative behaviors such as earnings management.Market authorities are also suggested to intensify their supervision and further improve the market system and accounting standards,thus promoting the stable and effective development of China’s capital market. |
