Case Research About *ST Antai's Earnings Management During Getting Rid Of Special Treatment

Since the reform and opening up,China has increased supportive strength for the development of market economy.Therefore,the economic power of China has been continuously improved,market economy developed at a quick pace,and the capital market has gradually established.However,Chinese stock market has not been growing for a long time,so there are still many imperfections in the supervision of the stock market.These regulatory loopholes have created conditions for listed companies to perform earnings management.Improper use of earnings management will probably lead to serious economic consequences,harm the interests of investors,and affect healthy and stable development of our society and economy.The special treatment system is a unique system in China,which treats specifically with the stock transactions of listed companies that are in abnormal financial conditions or other abnormal conditions in Shanghai Stock Exchange and Shenzhen Stock Exchange and puts"ST" in front of the companies' short name to distinguish other listed companies.On the one hand,this system is formulated to inform investors of investment risks and protect the interests of investors,so as to maintain healthy and stable development of the securities market.On the other hand,it is to force these companies to change their operating conditions.However,the improvement of operating conditions needs long time,so*ST companies will use various earnings management methods to adjust profits to achieve profitability,so as to get rid of special treatment in a short time.That has become a common phenomenon in*ST companies.Based on this background,this paper analyzes the motivation of the earnings management,the methods of earnings management,and the results of earnings management through the case of*ST Antai.It is found that*ST Antai used earnings management methods to get rid of special treatment successfully but the company's actual operating conditions has not been improved.And because of the asymmetric information,investors cannot understand the company's real operating conditions and are confused by the results of the earnings management,so they cannot make correct investment decisions,finally the interests of investors are damaged.Based on this finding,this paper gives some countermeasures and suggestions to govern the earnings management behavior of*ST companies.The paper is mainly divided into five parts.The first part is introduction.It mainly introduces the research background,research significance,research methods and research ideas of this paper.The second part is institutional background,related theory and literature review.At first,this part introduces special treatment systems background.Then it introduces related theory,including principal-agent theory and asymmetry information theory.Finally,it sorts out the relevant literature on the concept of earnings management,the motivation of earnings management,the means of earnings management,and the economic consequences of earnings management and then reviews the literature.The third part introduces the case.It mainly introduces the basic situation and the process of getting rid of special treatment of*ST Antai.The fourth part is case analysis.This part firstly analyzes the motivations of earnings management about*ST Antai,and then analyzes means of earnings management,and finally analyzes the results of earnings management,including whether earnings management of*ST Antai was successful and whether profitability has improved and*ST Antai stock price performance.The fifth part is conclusions and recommendations.According to previous case analysis,this part summarizes the characteristics of*ST Antai earnings management from the motivation,methods,and results to propose the research conclusions of this paper.Then it gives some countermeasures and suggestions to govern the earnings management behavior of*ST companies.