Research On Enterprise Earnings Management In Convertible Bonds Financing

Recently,the refinancing market has been affected by the New Deal.The convertible bond market in our country has developed vigorously.A large number of listed companies with refinancing need choose to transform financing by issuing.The refinancing process of enterprises is often accompanied by earnings management behavior in order to obtain the maximum financing income.However,the excessive earnings management weakens the credibility of the financial data of the enterprise,affects the information users,and may even affect the operation of the enterprise.Therefore,it is of great significance to study the motivation,means and economic impact of earnings management behavior of enterprises before issuing convertible bonds.In the existing researches,there are few theoretical researches on earnings management behavior in the process of corporate convertible bond financing,and most of them adopt the method of empirical research,without in-depth exploration of the details of this process.Therefore,this paper raises three questions: in the process of issuing convertible bonds,do the enterprises conduct earnings management behavior? What are the motives and means of earnings management?What are the economic consequences? This paper selected Kolun Pharmaceutical(002422.SZ)as the research object.The case analysis includes the identification of earnings management before the issuance of convertible bonds,the motivation,means and consequences of earnings management.First of all,this paper introduces the convertible bond earnings management theory,Kolun Pharmaceutical and the basic situation of the industry;Secondly,based on the financial data and public market information of Kolun Pharmaceutical,the earnings management behavior of the company before the issuance of convertible bonds was identified,and its motivation,means and economic impact was analyzed accordingly,so as to draw relevant conclusions and suggestions.The research of this paper found that:(1)Kolun Pharmaceutical had earnings of Kelun Pharma management behavior before issuing convertible bonds,and achieved roe standards through earnings management,and successfully issued convertible bonds.(2)Kolun Pharmaceutical achieves the purpose of increasing profit by significantly reducing sales expenses,financial expenses and increasing non-recurrent income.(3)Kolun Pharmaceutical significantly increased its profits in the short term through earnings management,but reduced its solvency and operating capacity,resulting in overestimation of performance.After the issuance of convertible bonds,short-term operational problems were exposed and stock prices fell.Finally,based on the above analysis,this paper respectively gives relevant suggestions to enterprises and relevant regulatory agencies from the aspects of improving enterprise accounting standards,strengthening corporate internal governance and improving related laws and regulations on convertible bonds.