Research On Non-Recurring Profit And Loss Earnings Management Of Xiagong Co.,Ltd

With the in-depth development of China’s multi-level capital market construction in the future,the horizontal competition among listed companies will become more and more intense.St（special treatment）system refers to a unique compulsory delisting and risk control early warning mechanism in China’s securities market,which makes special management on the stock trading behavior of listed companies with abnormal financial conditions or other major abnormal fluctuations.There are also some loopholes in the specific division standards and information disclosure of non recurring profit and loss items in China’s securities law.Therefore,the implementation of non recurring profit and loss earnings management has gradually become one of the habitual practices adopted by the management of some ST listed enterprises in order to effectively prevent their delisting.ST companies often use earnings management to whitewash financial information,which will affect investors’ judgment and decision-making.Over time,this situation will even seriously affect the long-term stability of the operation of China’s securities market,which greatly inhibits the healthy development of China’s capital market.Therefore,the research on how to use non recurring profit and loss items for earnings management of listed companies also has considerable research value.Based on this background,this thesis will take Xiagong Co.,Ltd.as a case study through case study,and study its use of non recurring profits and losses to implement earnings management,so as to successfully "Uncap".Firstly,sort out and summarize the relevant research literature at home and abroad.Then,it further expounds the historical background of ST system and the relevant theoretical knowledge of enterprise non recurring profit and loss and earnings management,and then further explores the overall situation and characteristics of St enterprise non recurring profit and loss earnings management.Thirdly,it introduces the case company Xiagong Co.,Ltd.,explains the enterprise background,summarizes the process of "wearing hats twice and taking off hats twice",identifies and tests its earnings management experience,analyzes its motivation and means of using non recurring profits and losses to implement earnings management,and evaluates the effect of earnings management.Finally,according to the problems found in the research,the corresponding governance suggestions on restraining the earnings management of non recurring profits and losses of St enterprises will be given.Through the research,this thesis draws the following conclusions: first,by using the empirical identification method and model identification method,it is tested that Xiagong do use the non recurring profit and loss earnings management method to whitewash the earnings;Second,China’s imperfect delisting mechanism,insufficient market supervision and the concealment of earnings management have brought operational space to Xiagong’s earnings management behavior;Third,although st enterprises can retain their listing qualification for a short time after taking off the cap through earnings management,in the long run,the company cannot ensure long-term sustainable profitability in this way;Fourth,regulating the non recurring profit and loss earnings management behavior of Listed Companies in China needs the contribution of all parties.Enterprises should fundamentally improve the company’s operating performance,the relevant systems should reasonably regulate the earnings management behavior of listed companies,and the relevant external supervision organizations should also seriously exercise their supervision responsibilities.