Research On Earnings Management Of ST Company's Uncapped Earnings Based On Related Party Transactions

In recent years,the problem of earnings management has been a hot topic of accounting scholars.Many listed companies use related party transactions for earnings management to avoid delisting.Earnings management has a whitewash effect on the financial statements of enterprises.These whitewashed financial data are easy to make investors make wrong investment decisions.Based on this background,taking * ST Shaogang Iron and Steel Company as an example,this paper studies the means and reasons of earnings management by using related party transactions,and analyzes the consequences of successful removal of ST company’s cap.After ST company successfully removed its cap by using related party transactions,it has not fundamentally solved the problem of insufficient profits of the enterprise itself,investors and creditors are easily confused by whitewashed financial statements,thus making wrong investment decisions.The case of * ST Shaogang is elected because of the overall downturn of the steel industry,which has a strong motivation of earnings management.* ST Shaogang is the only company in the steel industry that has been implemented risk warning twice in five years,which can provide a good material for the case study.This article is divided into six parts: the first part is the introduction,mainly introduces the research background and purpose of this article,and analyzes the research methods used in this article;the second part is the literature review,analysis and summary of domestic and foreign scholars on earnings management,related party transactions;the third part is the concept definition and theoretical basis,mainly introduces earnings management,related party transactions related concepts and basic theory.The fourth part is the ST company related party transaction earnings management characteristics and methods.The fifth part is the introduction of the case,the * ST Shaogang background,industry conditions are described in detail,analysis of * ST Shaogang use of related party transactions for earnings management reasons and the use of the main means,as well as the consequences caused by cap.The sixth part is the conclusion and the suggestion,mainly unifies the * ST Shaogang Iron and Steel Corporation the actual condition to obtain the ST company to have the earnings management the behavior and to preserve the shell to be related,uses the related party transaction earnings management not to be able fundamentally to solve the enterprise own profit insufficiency question.