Research On Earnings Management In The Process Of Convertible Bond Financing Of Souyute

With the release of the new rules on refinancing and shareholding reduction by the CSRC in 2017,refinancing means such as directional additional issuance and share allotment are becoming less and less attractive to listed companies,while convertible bonds are gradually favored by listed companies because of their unique financing characteristics and the support of policies in terms of review and subscription,thus accelerating development.The policy has enabled the convertible bond financing market to attract a great many listed companies in need of refinancing,with convertible bond financing now making up a growing portion of the refinancing structure.Wide attention has been drawn to the related earnings management issues in the market: To acquire financing through the successful issuance of convertible bonds,some businesses employ earnings management to reach the profit threshold mandated by the issuance,this creates a situation in which the company’s operating conditions can decline significantly after the funds are raised;in addition,many companies use surplus management to improve their company’s performance in order to achieve the purpose of converting shares as an incentive for investors to convert,resulting in sharp fluctuations in corporate performance during the life of the convertible bonds.Excessive surplus management practices undermine the credibility of the company’s financial data,misleads investors’ decisions,damages investors’ interests,and adversely affects the company’s future performance.Investors and regulators must conduct in-depth research on earnings management in the issuing of convertible bonds,as the regulations on convertible bond financing are not perfect,accounting standards provide more operating space,and the protection of investors is still incomplete.Thus,it is of great practical importance.The research object of this thesis is the convertible bonds issued by Souyute Company,and its focus is on the recognition and computation of the level of earnings management in the issuance of these bonds,as well as the impetus and methods of earnings management,and the examination of economic effects.Theories concerning the earnings management of convertible bonds are initially presented in this thesis,followed by an exploration of special companies and their respective industries,the search of special bonds,and the functioning of the company.Analyzing the earnings management issues in the issuance of convertible bonds,empirical identification and model calculation of the earnings management behavior of enterprises,based on financial data and public information,is conducted.At long last,pertinent deductions and proposals are formulated.Souyute’s successful issuance of convertible bonds,with earnings management and the intention to encourage conversion of shares,was revealed by the analysis of this thesis.Moreover,during the issuance process,Souyute executed.By reducing inventory depreciation reserve to boost non-recurring profit and loss,delaying the drawing of inventory depreciation reserve to postpone information disclosure,and broadening credit policy to modify operating profit,earnings management can be improved.Third,although the enterprise successfully realized the issuance of convertible bonds through earnings management,it also reflected such problems as the single financial entry threshold of the convertible bond financing market,strong subjectivity of the recognition system related to asset impairment losses,delayed information disclosure and imperfect corporate internal governance.This thesis proposes the following proposals,based on the analysis above: perfecting the laws and regulations of convertible bonds,refining the accounting standards of enterprises,standardizing the information disclosure behavior of issuing companies,and fortifying the internal governance of companies,from the perspectives of the relevant regulatory agencies and enterprises.