Research On Earnings Management Behavior Under Equity Pledge Of Major Shareholder

Since the market operation in 2013,equity pledge has swept through the capital market with its advantages of high efficiency,simplicity and low threshold.More than 90% of the stocks of listed companies in China have been pledged,the pledge of stock right has become one of the important means of financing for the major shareholders.While the major shareholders enjoy the financial convenience brought by the pledge of stock rights,they are also likely to face the risks brought by it.When the ratio of pledge is too high,and the stock price of the company has a continuous shock drop,or even fall below the warning line and open position line,then the risk behind the equity pledge will be exposed.In recent years,the academic circle has paid close attention to the research on the issue of Equity Pledge,especially the market systematic risk caused by equity pledge,and has also studied the issue of earnings management that may arise from equity pledge from the perspective of earnings management,the related empirical research has already obtained the rich research result and the empirical research discovery.This paper will use the case study method,through the case of the company’s major shareholders specific pledge behavior,pledge motivation and may have an impact on earnings management analysis,it is of theoretical and practical significance to further reveal the mechanism of equity pledge on earnings management and the means of earnings management.This thesis takes Zangge company as a case to study the influence of the pledge of large shareholders on earnings management behavior of listed companies.First of all,on the basis of a systematic and comprehensive review of the current research on equity pledge and earnings management,the paper is based on the principal-agent theory,the Information asymmetry theory,the private interests of control theory and the contract theory,secondly,it introduces the development background of Zangge company,the situation of the pledge of stock rights and the current situation of the surplus,and analyzes the motivation of the pledge of stock rights of major shareholders,by studying the earnings management behavior under the pledge of stock rights,it is found that the major shareholders will conduct earnings management for the purpose of preventing the transfer of control rights,covering up their tunneling behavior and maintaining the continuous pledge,at the same time,the measurement of earnings management shows that earnings management does exist in the Zangge industry,and further analyzes the specific ways of earnings management in the Zangge industry,found that the company mainly uses accounts receivable,discretionary costs and related party transactions to conduct real earnings operations,then it analyzes the impact of earnings management on the company’s financial situation,the company’s value and the small and medium-sized shareholders,at the same time in the following to listed companies and financial institutions and regulatory authorities put forward relevant policy recommendations to regulate large shareholders under the pledge of equity earnings management behavior.