| Earnings management is a research area that has been widely investigated and concerned by scholars in China and abroad.At present,there are also some companies using earnings management to manipulate profit information.The results have led to a deterioration in the quality of accounting information,disrupting the order of the capital market,and violating the interests of stakeholders.Meanwhile,the Special Treatment regime exists in Chinese mainland’s securities market,where the China Securities Regulatory Commission issues delisting risk warnings for companies with continuous losses.Some listed companies with special treatment may use earnings management to manipulate profit information to avoid the risk of delisting.Therefore,it is worth investigating the earnings management behaviours of listed companies to prevent accounting misconduct and control distortion of accounting information.In this dissertation,the case study method,literature research method,and comparative analysis method are adopted to study the earnings management behaviours of Company F.Firstly,the relevant literature on earnings management is summarised,including motives,methods,consequences,and the mechanisms to control earnings management.Secondly,the earnings management behaviours of Company F are analysed,including the motives,and the degree measurement of earnings management combined with the Modified Jones Model and Real Earnings Management Model.It is found that Company F used related party transactions,asset disposal,manipulation of production and operation rhythms,public subsidies,and the reversal of impairment to conduct earnings management.Thirdly,the consequences of earnings management behaviours are analysed,and it is discovered that earnings management could not have positive consequences on the financial performances of the company,accounting information quality,and the economic decision-making of stakeholders.Finally,governance suggestions are presented from five perspectives including governances,independent directors,certified public accountants,accounting policies,and the China Securities Regulatory Commission to control the earnings management behaviours of Company F.In addition,the conclusions and limitations of the study are also suggested.The study concludes that Company F engaged in earnings management to avoid delisting risk and maintain investor confidence,but it does not have positive consequences and is harmful to the long-term development of the company.Furthermore,the real earnings management behaviours of manipulating production and operation rhythms adopted by Company F were more concealed and difficult for stakeholders to detect than the accrual earnings management. |
