Research About Listed Company Use Earning Management To Get Rid Of Special Treatment

In recent years,China's economic growth slowed.Due to a number of industries overcapacity coupled with the shrink of domestic and international energy market demand,new energy industry which led by Tianweibaobian sinks into sluggish situation.Because of the continuing losses of 2012 and 2013,Tianweibaobian is named with the prefix*ST and becomes*ST Tianwei by CSRC(China Securities Regulatory Commission)according to"Delisting risk warning".ST system(Special Treatment)is a specific system in China's securities market.It add prefix ST to the listed company which have poor performance to warn investors to pay attention to the recent financial situation of the company.This system is still flawed.Non-ST listed companies obtain greater benefits than ST listed companies.Therefore,*ST Tianwei has to use a variety of means to cancel the ST prefix.It is a long-term process to improve profitability by improving internal management or changing business behavior,making it difficult to achieve management goals quickly.*ST Tianwei uses earnings management to improve business performance in order to cancel ST prefix as soon as possible.Firstly,this paper lies the foundation for the theoretical analysis by reading domestic and foreign related literature,than sums up the concept and means of earnings management.Secondly,this paper makes a theoretical analysis of ST companies'earnings management from 3 aspects:the ST system,the premise of ST companies' earnings management,the impact of ST companies' earnings management.Afterwards,this paper chooses*ST Tianwei as a case,and introduces the background and the course of the case.This paper finds methods of earnings management used by*ST Tianwei,including connected transaction,debt restructuring and large provision asset impairment.Finally,this paper gives advice to supervision department about governance of earnings management of ST companies.These proposals hope to attract the attention of relevant departments,establish and improve the corresponding laws and regulations,strengthen the financial control of listed companies,and strengthen China's securities market.