Earnings Management Research Of The Gem Listed Company Under The Background Of Delisting

Since the October 23,2009 the China Securities Regulatory Commission announced the official launch of the Growth Enterprise Market, the first 28 chinext companies in 30 listed in Shenzhen Stock Exchange. As the Shenzhen Stock Exchange on April 20,2012 the official launch of the "Shenzhen Stock Exchange Gem Stock Listing Rules", the gem listed companies has entered a new stage of development, and by the investors in hot pursuit. Part of the gem delisting rules comes into force on May 1,2012. Company delisting, both for the company’s shareholders, management or relevant departments, are extremely unfavorable. Therefore, in this context can speculate that in order to realize "security card" motivation and their own utility maximization, the gem listed companies faced delisting risk will do their best to take measures of earnings management. And, as in recent years, the listed companies faced with the risk of delisting in order to avoid delisting of earnings management has gradually received extensive attention of scholars both at home and abroad. Therefore, this article in the perspective of the gem listed companies faced delisting risk, conduct the thorough research for this kind of company’s earnings management behavior.In order to explore the gem delisting policy was first released that year, the loss company’s "stress response" in the next year, this article selects 13 losses "vanguard" loss in 2012 as the observation object, and it can be divided into two kinds, respectively study the companies under the background of the delisting, next year’s earnings management behavior characteristics and laws. According to the amount of the sample companies, and based on the predecessors’research methods, eventually adopted the "multi-case method" to analyze the sample companies. And in order to verify the hypothesis H1, this paper uses the model as a kind of calculation method, in order to calculate the delisting policy was first released that year, the sample companies (although only 13, but is still the whole samples of the gem that meet specific criteria) in the next year whether or not earnings management and the direction of earnings management, laid the foundation for the next study.Through accrued (modified Jones model) and real earnings management model calculation, the mean T test and financial ratio of longitudinal comparison and analysis based on the data of the sample companies, found that the sample companies exist obvious earnings management:among them, the gem listed companies of the first annual loss and the second year profit, in second year there is an obvious trend of upward earnings management; The gem listed companies for two consecutive years of losses, in second year of losses, there is no obvious trend of earnings management (upward or downward):or earnings management upward, because the companies didn’t want to because of the loss is too serious and make shareholders or investors lose confidence or cause share price continued to reduce; Or earnings management downward, do the profit loss, and prepare for next year’s turnround, namely "big bath"; Or two trends exist at the same time. In addition, through research, this paper summarizes the gem listed companies that earnings management means of preference:in this article find the four common methods of earnings management, samples for loss of one year and then successful turn around, the most commonly used method is the preparation of provision and turn it back, the second is the non-daily business activities, then the inflated sales or interested in expanding the scope of the credit, expenses for delaying confirmation or hidding in assets projects using the minimum; Samples for two consecutive years of losses, the most commonly used method is the non-daily business activities, the preparation of provision and turn it back, confirm expenses in advance or delay, and the samples of this article to use relatively small for delaying to confirm sales. Study can help stakeholders and information users to judge the companies’ actual operating conditions when studying the loss listed companies’earnings management, and make more accurate investment decision accordingly.The structure of this paper is arranged as followings:the first part of the paper introduces the research background, significance and research framework; The second part, first of all, the gem of our country and gem delisting system to carry on the simple introduction, secondly, we review the meaning and the motivation of the earnings management, the literature of accrued and real earnings management, finally, generalizes the earnings management motivation and technical means of the loss listed companies; The third part analyzes the theory on the earnings management, and put forward the research hypothesis of this paper; The fourth part introduces sample selection process, the case company’s basic situation and research design; The fifth part through accrued (modified Jones model) and real earnings management model calculation, the mean T test and financial ratio analysis on the sample companies for multi-case analysis; Last part is the research conclusion, the revelation, shortage and the outlook of this paper.