Study On Earnings Management Behavior Of Hytera Communication Company

With the rapid development of China’s capital market,more and more companies have entered the market in different ways.In the process of this rapid development,relevant laws and regulations and standards have also revealed some areas that need to be improved,which has provided some companies with room for earnings management.Since the concept of earnings management was introduced,it has been the focus of attention of scholars at home and abroad.Earnings Management is often chosen by companies as a tool to regulate their business activities and to modify their financial statement performance,and its existence is accompanied by certain controversies,and its means are gradually diversified and complicated due to the continuous changes and improvements in accounting laws and regulations.Improper Earnings Management conceals the true status of a company’s operations,reduces the accuracy and authenticity of accounting information,and damages the vital interests of investors and creditors.In this context,this paper selects Hytera Communication Company as the research object.Firstly,on the basis of summarizing and summarizing the research results on earnings management at home and abroad,the company’s earnings management behavior is identified and its earnings management motives are analyzed;secondly,combining the company’s financial data from 2016 to 2021,it is found that its earnings management means mainly include: transferring the equity of subsidiaries,disposing of non-current assets,adjusting the capitalization amount of R&D expenditures and resorting to government subsidies;then,the impact caused by the company’s earnings management behavior is specifically analyzed from Then,we analyze the impact of the company’s earnings management behavior from two perspectives: financial indicators and market performance;finally,we make suggestions in terms of improving the remuneration and incentive system,optimizing the internal control system,strengthening the company’s information disclosure and enhancing external supervision.This paper uses literature research,case study and event study methods to analyze the earnings management behavior of Hytera Communication Company.The final conclusion of the study is that reasons such as weak revenue growth and debt risk avoidance motivate the company to engage in earnings management and use earnings management as the main way for the company to regulate its profits.Although net profits improved after the implementation of earnings management,gaining short-term improvements,there was no actual improvement in profitability and growth in the long run,indicating that earnings management does not have a sustainable effect on improving company performance.In the future,reducing earnings management practices and finding a breakthrough suitable for its own development is the long-term way to ensure the company’s sustainable development.