The Effect Of The New Government Subsidies Standard On The Earnings Quality Of Listed Companies In The Automobile Manufacturing Industry

Since the reform and opening up,China’s economy has developed rapidly.Correspondingly,accounting standards have also developed rapidly on the road to adapt to national conditions and international convergence.In order to further improve China’s accounting standards system,improve the quality of financial statements and transparency of accounting information,and maintain the continuous convergence between China’s accounting standards and international financial reporting standards,The Ministry of Finance issued the "Accounting Standards for Enterprises No.16-Government Subsidies(Amendment)" in 2017.The recognition and measurement of the new government subsidy has had a great impact on the quality of corporate profits.However,for the specific impact of the new government subsidy standards on the quality of accounting information,domestic research has just begun,and foreign research lacks market environment support with Chinese characteristics.This article intends to explore the impact of the implementation of the new standards on the automotive manufacturing industry and the specific case of corporate earnings quality.Based on the conceptual framework of financial reporting and the useful decision-making of accounting information,this paper analyzes the evolution process of the old government subsidy standard and the changes of the new standard.A theoretical framework for the impact of the new criteria on the evaluation of earnings quality was established.Then from the perspective of profit structure,earnings quality related indicators and earnings management from the point of view of the impact of the new standards on the entire industry profit quality.On this basis,the paper discusses the specific impact of government subsidies on the profit quality of different enterprises,and analyzes the differences in the impact.From the perspective of the industry as a whole,this paper finds that the new standard reduces government subsidies to the operating income,other earnings,and non-business income of the profit statement according to their specific nature,making the profit structure of the automotive manufacturing industry more consistent with the substantive results of its own business operations.The relevant earnings quality evaluation index score rose and the earnings quality was directly improved.The improvement of the new standard on the financial statements will indirectly lead to the decline of the company’s surplus management willingness,the degree of surplus management in the automotive manufacturing industry will be significantly reduced,and the profit quality will be indirectly improved;From the point of view of individual enterprises,the operating conditions of enterprises and the degree of dependence on government subsidies will affect the impact of the new standards on the profitability of enterprises.The impact of the new standards on the profitability of different enterprises is quite different.Compared with Great Wall,the profit of Jianghuai Automobile is more dependent on government subsidies,and the impact of the change in standards is more obvious.