Study On Earnings Management Of Loss Listed Companies During The Risk Warning Sensitive Period

In China, the qualifications of listed companies has been a scarce and valuable resource, fighting and protecting the "shell" of the enterprise in terms of resources is so important. When a listed company has been special treatment, the value of equity investments will be severely affected. The company needs to face the risk be suspended, the management of the shoulder will be tremendous pressure to bail out.The loss of listed companies are not formed overnight, it can’t operating well by the normal operating in a short term. Thus, the companies will get rid of the delisting of doom by earnings management, prompting companies to keep profits mode "two years of losses, the surplus a year". On the other hand, supervision has been strengthened, traditional accounting fraud or manipulation of accruals way to manage earnings meet a greater restrictions, management in order to meet the specific needs of the surplus growing tendency in a more subtle and no risky way to manipulate the company’s earnings, real earnings management activities.The special delisting system of China leads to a risk warning sensitive period. Whether the Listed Companies use earnings management to avoid be delisted or suspended during the risk warning sensitive period? And what are the characteristics of earnings management during the phases of risk warning sensitive period? In the pressure to protect "shell", does it will use real earnings management to manipulate finance reports to make earnings?Firstly, this paper analysis the*ST companies since2003systematically by described statistical analysis, found that companies were made the accounting earning. In fact, their long term performance did not really improve. Secondly, the paper select the companies which marked*ST in2010as samples, use cross-sectional modified Jones model to calculate the discretionary accrued of the year be*ST, the double years before and one year after respectively. The result shows that the companies have positive earnings management and negative earnings management in the year be*ST and the two years before respectively, but the earnings management is unobvious in the year after be*ST. Finally, from the aspect of earnings management, since the system began, the paper select the companies marked*ST in2004-2012as samples, to explore their will use accrued earnings management and real earnings management to get rid of the crisis.Contribution of this paper is mainly reflected in the following three areas. Firstly, to define the companies’ loss years as the risk of warning sensitive period, from the sensitive time dimension to research company earnings management features. Secondly, it also finds that loss companies will use real earnings management companies to make accounting earnings. But the cost of real earnings management will be higher than accrued earnings management. Thirdly, it’ll expand the research on earnings management and help government to develop a more complete accounting standards and regulatory regimes.