Research On Double Information Manipulation Of Earnings Management And Performance Attribution

Generally speaking,the information disclosed by a listed company is very important.It can reflect its business performance to the market,and at the same time make market participants have good or bad expectations about it,so as to make economic decisions that are beneficial to them.Therefore,it has always been the focus of market investors and potential investors.There are two types of information disclosed by listed companies,one is quantitative information based on financial statements;the other is non-quantitative information based on text descriptions.Nowadays,people tend to pay more attention to quantitative information and ignore non-quantitative information.However,non-quantitative information often occupies most of the content and is more likely to be manipulated by management.For example,only information that is beneficial to the company is disclosed,while information that is harmful to the company is concealed or modified,so as to confuse investors and lead them to Investing at the expense of investors.Therefore,attention to non-financial information is also very necessary.Management often manipulates disclosure through earnings management.The managers of the company use various earnings management methods to manipulate various indicators of the company’s operating conditions to achieve the purpose of inflating the company’s profits.This practice reduces the quality of financial information and hinders investors from identifying internal information.accuracy and validity.But earnings management remains at the level of financial statements,which is relatively easy for investors to see through.For the purpose of covering up their earnings management behavior,management uses self-interested performance attribution to manipulate textual information,that is,use non-quantitative information to make plausible explanations for changes in performance.Earnings management and performance attribution often occur at the same time.Where there is earnings management,performance attribution generally occurs.Business managers generally first use earnings management to adjust the company’s profits,turning negative into positive,and then performance attribution interprets the changes in profits caused by earnings management plausibly,concealing earnings management behavior,and confuses investment.By.Generally speaking,when a company uses earnings management methods to make its business performance good,the company’s managers will attribute the credit to the company’s efforts and the company’s high level of management,without mentioning external factors.factors,such as industry recovery,national policy support,etc.Sometimes it even mentions how bad the economic situation is and how sluggish the entire industry is,in order to further set off the credit of the operators.On the contrary,when the company’s operating results are poor and even the net profit has been falling year after year,the company’s managers do not mention or vaguely mention the company’s own problems,and blame it on the fierce competition in the industry,inflation,economic downturn,etc.External environmental factors,thereby covering up the problems of the enterprise itself,shirk the responsibility of the management.Under the cover of earnings management behavior by performance attribution,earnings management methods are more subtle and difficult to judge and identify.The double information manipulation of earnings management and performance attribution mostly occurs in *ST company,which is a listed company that has lost money for two consecutive years and is specially processed.If it fails to improve its operating performance and become profitable within a certain period of time,it may be forced to delist.Because listed companies have the advantages of easy access to financing and increased visibility,*ST companies have a certain urgency to turn negative profits into positive ones,but it is easier said than done to reverse the company’s operating conditions in a short period of time,so the use of earnings management methods has become a * A major "tool" for ST companies to retain their listing title.At the same time,*ST company must have a reasonable explanation for the changes in performance,so as to convince the public and maintain a good image of the company.Therefore,performance attribution has become another "tool" of *ST’s manipulation.Therefore,this paper selects the *ST company Q Company,which has an urgent need to "remove the hat" and has successfully "removed the hat" for research.First,by reading a large number of literatures to understand the research status of domestic and foreign scholars on earnings management and performance attribution to learn more about concepts related to earnings management and performance attribution.Summarize the relationship between earnings management and performance attribution,and identify and supplement what is missing in today’s research on earnings management and performance attribution.On this basis,use the case analysis method to analyze the Q company.First,by analyzing its financial statements in the years before and after its "cap removal" and comparing it with the data changes of the entire industry and other similar companies,to identify whether it has Earnings management behavior,and further analyze the specific aspects of the motivation of earnings management,identify the means of earnings management,and judge whether the earnings management behavior has achieved the goal.Then we will study the performance attribution behavior of Company Q to see how its performance attribution manipulates accounting information and conceals its earnings management,what is the effect of the double information manipulation of earnings management and performance attribution,and what is the market reaction.Finally,we analyze why Company Q can unscrupulously carry out dual information manipulation of earnings management and performance attribution,and what loopholes it exploits.Based on this,we put forward reasonable suggestions to the company itself,market investors and relevant departments to regulate market order and create a favorable investment environment.