Research On The Recognition And Supervision Strategy Of Profit Manipulation Behavior Of Listed Companies

This paper is designed to investigate the methods and recognition of profit manipulation of the listed companies.Profit manipulation is the act of illegal profit adjustment.Companies adjust profits to avoid policy constraints and meet shareholders’ need.Many listed companies of China cover the authenticity and integrity of financial statements by profit manipulation for all kinds of reasons such as increase issues in stocks,rationed shares and company shell.This kind of profit manipulation hurts the legal interests of investors and disturbs the order of capital markets.The reality of financial statements of listed companies has respect to the function of most optimum distribution of resources in the stock market.It also reflects the rationality and effectiveness of government regulation policy.The research and identification of profit adjustment has a great significance no matter for investors or for government regulation policy.Financial statements of listed companies reflect the profitability and the financial standing of companies.The financial statements are also important basis for investors to base their investment decisions and evaluate companies.So,real financial statements are the base of most optimum distribution of resources in the stock market.This paper analyses the physical truth of listed companies by qualitative method and quantitative method.Firstly,this paper analyses the difference between profit manipulation and earnings management.Secondly,it reviews the research status and research results at home and abroad.Then,it analyses the intention,the means and the new change of listed companies.It discusses the recognition methods of profit manipulation from various angles such as accounting film,law office,sponsor institution and medium.It analyses Fengshen shares,Super shares,Hali healty and Huarui wind power by M-score model.So people can get a better understanding of depth and breadth of profit manipulation.Then new changes of supervision methods,supervision strategies which include active and passive patterns,as well as the differences between active and passive supervision strategies are discussed.Supervision strategies can be divided into active patterns and passive patterns.Entrepreneurial spirit and the build of corporate social responsibility belong to active patterns.Increasing the penalty for profit manipulation and improving the responsibility of intermediaries are belong to passive patterns.On the basis of all above,the following suggestions are made: In order to improve the current regulatory environment,the improvement of the recognition of profit manipulation is absolutely necessary;It is suggested for supervision departments to adjust both their supervision strategies and punishment for profit manipulation;It can strength the whole societies’ sense of integrity and social responsibility by utilizing the power of modern media at times.So supervision departments can greatly decrease the activities of profit manipulation of the listed companies and purify the financial market.At the end,this paper gives up a suggestion: all parts of the capital market should form resultant force by building a more transparent and more open market to the better recognition and supervision of profit manipulation of the listed companies.