Research On Earnings Management Under The Background Of Performance Commitment Of Giant Network Company

At present,the level of economic development in China has crossed from high-speed development to high-quality development.In the fierce market competition,enterprises must keep up with the pace of The Times and implement strategic transformation if they want to occupy a place.Backdoor listing as an effective way to expand capital came into being,and performance commitment as an indispensable subsidiary clause in backdoor transactions also appeared.Although the original intention of signing performance commitment is to ensure the fairness of transactions,the relevant regulations on performance commitment system in China are not perfect yet,leading to the emergence of many high performance commitment.Although many enterprises accurately complete the performance commitment period at the end of the commitment period,the performance changes after the commitment period,making people doubt the true profit situation during the commitment period.Earnings management behavior will not only reduce the reliability of financial data,mislead investors' judgment,but also is not conducive to the stable operation and development of economic market order.On the basis of combing past research results on earnings management under the background of performance commitment and combining with actual cases,we study earnings management behavior under the background of performance commitment in backdoor listing,In this paper,the case of Giant Network Company went public through backdoor in 2015,and signed a performance compensation commitment with Century Cruise,a shell company.During the commitment period from 2016 to 2018,it was found that the target was accurately reached every year,However,in 2019 after the commitment period,its operating revenue and profit both declined,which makes people doubt the authenticity of the enterprise during the performance commitment period.Through analyzing earnings management motivation,Finally,provides some preventive suggestions for earnings management motivation,The fairness of the performance commitment agreement can be guaranteed by constantly updating and improving the valuation mechanism and enriching and perfecting the terms of the performance commitment system,Through strengthening the information disclosure of the performance commitment party,increasing the intensity of regulatory punishment,increasing the implementation cost of earnings management,so as to effectively curb earnings management behavior,Therefore,this article hopes to provide some valuable perspectives for earnings management research by studying earnings management problems under the background of performance commitment compensation of giant network companies.