Study On Earnings Management With Non-Recurring Gains And Losses In *ST Companies

According to the sustainability of earnings in our country,net profit or loss can be divided into recurring and non-recurring items,while non-recurring gains and losses is disposable and accidental in frequency and nature,so it can not represent the real profitability of enterprises in the future.At present the definition of non-recurring gains and losses and disclosure system in our country are not perfect,while the delisting system issued by CSRC and stock listing rules revised by Stock Exchange reduce the requirements of getting rid of the delisting risk warnings.There are no requirements for non-recurring gains and losses.But once the*ST company was suspended from listing,it will be difficult for them to comeback because of the strict requirements,which include the deduction of non-recurring net profit is positive.The loopholes in the provision and the operability of non-recurring gains and losses,make non-recurring gains and losses the preferred earnings management approach for the*ST companies.The behavior of*ST companies not only affects the investors to make a correct understanding of the statements,it will also lead to the emergence of some "stiff and die" enterprise,which will affect the efficiency and healthy development of the capital market.This paper uses method of case studies.Before the case study,this article analysis the behavior of the earning management with non-recurring profit and loss of the ST company from accounting premise and conditions.This paper argues that the persistence of accounting earnings and the recognition of all gains and losses are preconditions.The loopholes in the delisting system and the imperfect system of non-recurring profit and loss,as well as the information asymmetry and signaling theory are the conditions.And the inevitability of stopping losses,resulting in*ST company's earnings management with non-recurring gains and losses can be expected.Based on the theoretical analysis,this article conducts a detail analysis on the case of*ST Xiali.The main items involved are non-current assets disposal,government subsidies and reversal of impairment losses on receivables.Its main business is facing difficulties,and non-recurring gains and losses is easy to operate as well as the existence of asymmetric information make it possible to choose non-recurring gains and losses as the main means of earnings management.The results show that*ST Xiali did not get any improvement in 2016,the company repeated the fate of the sale of domestic property.At the same time,this paper lists 17*ST companies of Shenzhen Stock Exchange as a supplement,intends to prove the earnings management with non-recurring gains and losses a common phenomenon.Finally,this paper believes that it is necessary to improve the stock issuance and the current delisting system in order to curb this behavior fundamentally,and continue to improve the definition of non-recurring concepts and disclosure system as well as strengthen internal and external supervision,will contribute to the investor protection.