| With the further improvement of China’s investment securities market,the China Securities Regulatory Commission and other regulatory authorities have formulated and improved many corresponding rules and regulations.In April 1998,the ST system was officially implemented in China.The ST system refers to the CSRC’s special handling of the stock trading of listed companies that have been found to be abnormal,and the early warning system for delisting risks,so as to protect the investment rights and interests of all shareholders of the company and ensure the healthy development of the capital market.However,for enterprises,if they are warned of the risk of delisting,they will face the risk of delisting and lose more financing opportunities.Under these circumstances,in order to retain the precious listing qualification and cope with the operational problems of the company’s management being unable to make effective improvements in the short term,the managers of the company often use the company’s earnings management to increase the company’s profitability in the short term,thereby avoiding the risk of delisting.In this context,the research object of this chapter selects listed company B,searches the relevant literature of earnings management,and analyzes the existing earnings management behavior according to the operation of company B from 2017 to 2020.The first part of this chapter focuses on the background and importance of the research;Chapter 2will summarize the concept,motivation,use and impact of earnings management.Chapter 3will start from the basic situation of Company B,analyze and explain the identification process and management process of Company B’s earnings management,and use the modified Jones model to test;Chapter 4 will analyze in detail the motivation and main means of earnings management of Company B from 2017 to 2021,and analyze the impact of this earnings management on Company B from the aspects of market performance,company stock price and financial performance,and analyze whether the income generated by earnings management can be sustained.Chapter 5 concludes from this case study that although Listed Company B has used earnings management to help companies withdraw the delisting risk warning in order to retain their precious listing qualifications,the profits brought by them are not durable,nor can they effectively improve the profitability of the enterprises,and their response in the securities market is not optimistic.Therefore,enterprises should correctly view the harm of earnings management to enterprises,and more actively handle the operational problems faced by enterprises,realize the sustainable development of enterprises,and maintain the healthy development of the capital market;Finally,it puts forward governance suggestions for the problems existing in the earnings management of Company B,and suggestions for dealing with the external mechanism. |
