Research On The Motivation,Means And Influence Of Earnings Management Of ~*ST Xiagong

Special Treatment is a risk warning system in China’s stock market.The operating method of the system is to deal with the stock transactions of listed companies whose financial or other conditions are abnormal.The system aims to protect the interests of investors,reduce investment risks and maintain the healthy and orderly development of the securities market.However,once the company is treated with special treatment,it will face the risk of delisting.Therefore,in order to maintain its listing qualification,many ST companies usually adjust their profits and achieve profits through earnings management in the case of poor real performance.Excessive earnings management will lead to the distortion of financial information,damage the interests of investors,and the securities market can not give full play to the advantage of capital market allocation.Therefore,it is of great significance to study earnings management behavior of ST company for investors’ decision making and the development of securities market.This paper takes *ST Xiagong as the research object,adopts literature research method and case analysis method,and comprehensively analyzes its earnings management behavior from the aspects of motivation,means and influence.The study found that,for the motivation of protecting the market and the compensation and performance of the management,*ST Xiagong made use of the earnings management methods of related party transactions and the sale of major assets,large reversal of impairment losses,access to government subsidies and the reduction of discretionary expenses to achieve profitability in the two key years of 2017 and 2020 and avoid delisting crisis.The influence of earnings management behavior of *ST Xiagong is mainly reflected in two dimensions: short-term market response and long-term financial performance.Through the event study method,it is found that the market has negative reaction to its earnings management behavior.At the same time,it is found that although the company succeeds in protecting the market,its financial performance has not been substantially improved.*ST Xiagong should improve main business profitability,strengthen internal governance and risk prevention and build digital operation,in order to get rid of dependence on earnings management by improving core competitiveness.Finally,this paper gets the following enlightenment: for listed companies,they should pay attention to business management and avoid over-reliance on earnings management;For the government,the delisting system should be strictly enforced and accounting standards should be perfected to avoid earnings management by enterprises that taking advantage of vulnerability in policy supervision.