Research On Earnings Management Of Listed Companies During Performance Commitment Period

In recent years,China’s economic development has been developing rapidly.However,due to the impact of COVID-19,China’s economic development is also under tremendous pressure.Enterprises must make some changes whether for their own development or for the sake of survival."Listing" has become the choice of many enterprises,which can not only raise their brand awareness,but also achieve the purpose of financing,so as to help enterprises move forward in a better direction.However,in view of the high standards and strict requirements of China’s IPO,many enterprises may not wait for the approval of listing qualification,and the opportunity for market development has passed.Therefore,backdoor listing has become the choice of enterprises.Although backdoor listing can enable enterprises to achieve the purpose of listing quickly,there are also many risk factors,the most critical of which is the determination of the target price.Because the valuation is more confirmed by the future profitability,there are too many uncertain factors,which has become the biggest risk point in M & A.In order to protect the legitimate rights and interests of both sides of the transaction and minority shareholders from infringement,the performance commitment system also came into being in due time.However,although the performance commitment system reduces the risk of M & A to a certain extent,it is faced with the risk that the commitment cannot be completed.In order to avoid huge performance compensation,some enterprises "take the edge" from the aspect of enterprise earnings in order to meet the requirements of commitment,that is,earnings management.Obviously,this behavior will not only greatly reduce the authenticity of its enterprise financial information,mislead stakeholders and the public,but also seriously damage the interests of counterparties and minority shareholders.Therefore,it is very necessary to further study earnings management under performance commitment.Based on the above background,this paper takes the backdoor listing of Yasha automobile of China public education as an example to deeply discuss the earnings management behavior of listed enterprises during the period of performance commitment,and analyzes the earnings management behavior of China public education from three aspects: motivation,means and economic consequences,hoping to clarify the internal relationship between performance commitment and earnings management,and put forward its own views.Firstly,it states the background and significance of the topic,introduces the research ideas and specific research methods,combs the literature on performance commitment and earnings management at home and abroad,and summarizes and analyzes the views put forward by some scholars;Secondly,it introduces the relevant concepts and theoretical basis,the current situation and institutional background of performance commitment,as well as the motivation and means of earnings management;Then,it enters the case part,introduces the two sides of backdoor listing,the content and completion of backdoor process and performance commitment,and finally analyzes the motivation,means and economic consequences of earnings management in public education.Through the research of this paper,it is found that one of the important incentives leading to the earnings management of China public education during its performance commitment period is the huge performance commitment.Although the earnings management behavior in the performance commitment period can enable the small and medium-sized shareholders of enterprises to obtain short-term benefits,it also has a negative impact on the long-term development of China public education.We should further improve the capital appraisal system and the relevant capital punishment system;At the same time,we should also appeal to the public to improve their awareness of earnings management,not to follow suit,but to improve their judgment and protect their own interests.Through the analysis of China public education,we hope to enrich the relevant research on performance commitment and earnings management behavior in China’s capital market to a certain extent,and ring an alarm for the majority of investors.