A Study On *ST Bio's Fleeing From Special Treatment With Earnings Management

Listing qualification is still a very scarce resource for Chinese enterprises.Any listed company is not willing to lose this resource.Therefore,for ST companies,they generally try to take relevant measures to remove the ST "hat" and prevent the risk of delisting.There is an endless stream of means involving earnings management,and supervision of the earnings management of ST companies has become more complicated and difficult.Because of the improvement of various systems,ST's space for earnings management through accrued profits has been continuously reduced,and companies are no longer willing to make discretionary profit management.Corporate management will tend to adopt lower-risk and less-discoverable realearnings management methods to improve performance and smoothly turn losses into a "protection package".After reviewing the relevant literature and screening of the more distinctive companies in the “caps” industry in recent years,Finally,pick out the most characteristic company *ST Bio that have been “four times removed”.First of all,the *ST Bio were approved in the most recent year in 2017 to “cap”,then the earnings management method adopted by this company will inevitably be in line with the trend of earnings management of listed companies in recent years,and the CSRC's decision to cancel Special treatment" standard.Secondly,by reading the annual report,*ST's Bio has performed a variety of methods when it comes to earnings management.*ST has adopted various methods of earnings management such as debt restructuring,“selling houses”,and changes in accounting estimates,which are representative and more consistent with research.Once again,the *ST Bio as a special enterprise for "caps" in 2017 has attracted the attention of many investors.This article takes *ST Bio as an example to focus on analyzing the earnings management incentives,means and their final results in the process of “cap removal” of enterprises.Finally,suggestions are given in terms of the company itself,government supervision,and external audit.