Research On The Earnings Management Of *ST Zhongrong

Due to strict auditing standards for listing,it is difficult for a company to resume listing once it is suspended due to delisting risk warning,so listing qualification has become a scarce resource in China’s capital market.Faced with this situation,the delisting risk warning companies are more eager to protect precious shell resources,the company management will use earnings management to turn losses into profits,to achieve the purpose of "shell protection",but earnings management behavior does not really improve the financial status of the company,the enterprise’s operating problems and delisting risks still exist.Therefore,this paper chooses *ST Zhongrong as the research object,on the basis of consulting and sorting earnings management theory and literature,combined with the whole process of delisting risk warning treatment,deeply studies the behavior of *ST Zhongrong earnings management,and draws relevant suggestions.This paper first summarizes the concepts and theories related to earnings management,and then preliminarily identifies whether the company conducts earnings management through abnormal profit elimination method and cash flow statement analysis,and preliminarily determines that the company has earnings management behavior in 2017.After that,the existence and degree of earnings management were quantitatively tested by modifying Jones model,and it was found that the company did have earnings management behavior in 2017 and the degree of earnings management was relatively large.In the fourth chapter after impact on the company’s earnings management motive,means,a detailed analysis,found the *ST Zhongrong flocking to remove suspended in the crisis,using large increase during the period of non-recurring profit and loss,adjust the asset impairment and cost means of earnings management,so as to help the company profit,but the income is not continuous,It has not improved the existing problems in operation and management,and the market response is not optimistic,so the company’s future development prospects are worrying.To see,want to achieve in the true sense,companies need to look more to the negative effects brought by earnings management,through perfect the corporate governance structure,improve the compensation incentive system,so as to achieve the purpose of preventing excessive earnings management,companies should optimize development path at the same time,to seek long-term development strategy,reasonable operating earnings.In addition,it is also necessary to strengthen the construction of external governance environment,so as to provide a good environment for the sustainable and stable development of listed companies.Earnings management has always been the focus of the academic field,the innovation of this paper is combined with the process of delisting risk warning in *ST Zhongrong,a comprehensive and detailed analysis of the motivation,means and impact of earnings management in *ST Zhongrong,while focusing on the negative impact,put forward relevant suggestions from the perspective of the company.At the same time,this paper hopes to help such companies re-examine the impact of earnings management,so as to restrain earnings management behavior to some extent and promote the sustainable and stable development of the company.