Earnings Management And Storage Of Listed Companies Under Weak Departure System

In China, the listing process is very difficult. A company has to go through a series of very strict inspection procedures and get approval from SEC if it wants to be a listed company, while it can raise funds quickly in the securities market. Therefore, the "back door" becomes very precious. When the financial situation of listed companies does not meet regulatory requirements for many years, managements will have a strong motivation for earnings management and take all kinds of measure to protect the name of listing. However, the current and weak delisting system provides an opportunity for earnings management.Therefore,how to improve the current delisting system becomes an urgent that needs to be solved by the SEC.Using the case study method,the paper is based on Portugal shares taking measures,such as "seeking government grants, debt restructuring, private placement, reversal of impairment and useful and so on,to achieve the position twice between gains and losses in 2005-2013.By learning the mature securities market delisting system of the United States,we will discuss how to improve the current and weak delisting system, and then come to a conclusion that the earnings management warning model and some limited indicators should be added in the current delisting system to make sure that the capital market could develop healthily.