Research On Le TV's Earnings Management From The Perspective Of Financial Risk

With the increasing competition in my country's capital market,enterprises will face many risks due to the complex and changeable economic environment in the course of business development.In order to gain a place in the capital market competition,most companies use earnings management to manipulate profits and conceal risks.Therefore,the issue of earnings management has widely existed in my country's listed companies.At present,my country's corporate accounting system is becoming more and more perfect,and the way companies carry out earnings management is becoming more and more concealed.Therefore,it is particularly important to find the fundamental reason for listed companies to carry out earnings management by studying the financial status of listed companies.The current research on earnings management mainly focuses on contract motives,capital market motives,accrued earnings management behaviors and real earnings management behaviors.Few scholars have conducted in-depth research on earnings management from the perspective of listed companies' financial risks.Taking LeTV as an example,this study builds a multi-dimensional financial risk early warning indicator system from the perspective of financial risk based on financial risk identification,financial risk early warning models and earnings management and other related theories,and uses the efficiency coefficient method to analyze profitability,asset quality,and debt.The four aspects of risk and business growth conduct a comprehensive analysis of LeTV's financial risk status and study the relationship between LeTV's financial risk status and earnings management motivation.Analysis shows that LeTV's earnings management motives are mainly derived from financial risks caused by its internal performance decline,slow asset liquidity,expansion of debt scale,and low solvency.In addition,the study also found that the earnings management behavior adopted by LeTV is mainly focused on improving profitability and operating growth capabilities.Specifically,it includes the following six earnings management activities: one is to use deferred income tax assets to make the deferred income tax expense of the enterprise negative,thereby inflating the net profit;the other is to use the provision for bad debts of accounts receivable to reduce accounts receivable The bad debts are moved to a later year to achieve the purpose of inflating the profits of this year;the third is to use minority shareholders to amortize the losses to increase the amount of net profit attributable to the parent company;the fourth is to inflate profits by reducing the amortization and impairment of intangible assets;Fifth is to blur the recognition scope of member income,inflating income and then whitewashing report profits;sixth,to use group relations to conduct related-party transactions that cannot be confirmed.The research conclusions show that,first of all,the financial risks of LeTV.com have been in a state of alert since its listing,and the asset quality and debt capacity were once in a state of great alert and serious alert,and the company is facing a greater risk of capital chain breaking.Then,from the perspective of profitability and operating growth ability,LeTV's earnings management behavior was analyzed,and it was found that LeTV did indeed use earnings management to inflate revenue and profits.Secondly,from the four dimensions that reflect the financial risk status of LeTV,we analyze the company's earnings management motivation,and find that there are potential crises in each dimension to prompt LeTV to carry out earnings management.Based on the above research conclusions,this research proposes relevant policy recommendations to help companies prevent excessive earnings management from both internal governance and external supervision.