Discussion On Non-Recurring Profit And Loss Earning Management Of *ST Mall

The ST system is an unique treatment system for China's stock market after the company's listing.Companies that have financial risks or other major issues will be subject to special treatment.Listed companies that are dealt with will use profit management to manipulate profits in order to protect their listing qualifications.Because the delisting risk is directly linked to the net profit,and the net profit includes the non-recurring profits and losses of the company,the use of non-recurring gains and losses to implement earnings management has become a highly cost-effective means for listed companies.Although the China Securities Regulatory Commission tries to make a clearer definition of non-recurring gains and losses,there are still many bottlenecks in actual operations,which,to some extent,provide opportunities for listed companies to manipulate profits.Earnings management is an accounting choice made by management without exceeding the bottom line of the guideline.It is designed to achieve the maximum effectiveness of the management and the maximum value of the company.Since it does not violate the criteria,it can be said to be a reasonable management behavior.However,many listed companies do unprincipled implementation of earnings management in order to earn their own profits,which leads to the fact that corporate accounting information cannot objectively reflect the actual situation of the company and mislead the information user to make decisions.At the same time,the creditors of the company must also bear greater responsibility.With regard to the debt risk,the regulatory authorities cannot implement reasonable and effective supervision and management.Analyzes the means and reasons why ST companies use non-recurring gains and losses to implement earnings management,and proposes scientific and reasonable suggestions for the reasons that exist to help regulate the management of listed companies.This article combines the theoretical analysis with the case study to deeply analyze the case.Starting from the background of the topic,its significance,and the review of the literature,it discusses the theory of earnings management based on non-recurring gains and losses of listed companies,and analyzes the earnings management behavior of *ST Mall in depth.Through the research on how to implement earnings management with non-recurring gains and losses under the predicament that *ST Mall faces multiple negative returns during consecutive years when profits are negative,it analyzes the methods and motives behind its operations,and reveals the company's ability to implement accounting standards that are related to operational deficiencies.Market loopholes and further targeted solutions to the aforementioned loopholes.Through the study of cases,the current situation of the non-recurring profit and loss system and earnings management system may leave room for the illegal activities of listed companies.It also proposes effective countermeasures and suggestions for narrowing the institutional space to regulate the management of similar companies.First of all,this paper briefly introduces the background and significance of the topic selection,outlines the non-recurring gains and losses as well as the more representative literature related to earnings management,introduces the research methods and research ideas of the article,and sets up the basic framework.The definition of non-recurring profit and loss and the development history in China are introduced immediately.Then,a theoretical overview of earnings management is carried out,including the concept of earnings management and the reasons for earnings management.Analyzing the company's use of non-recurring gains and losses to implement earnings management and economic results.From the contract theory,effective market theory,principal-agent theory and information asymmetry theory,lay the foundation for the following analysis.Secondly,this article through the use of non-recurring gains and losses of *ST Mall to implement earnings management to analyze the case in-depth.That is,it briefly introduces the industry background and the overall situation of the company,outlines the development history of the case company,and then introduces the company's means of implementing earnings management in detail,and analyzes in depth the four methods of related transactions,disposal of assets,government subsidies,and asset restructuring.This series of operations of the company reveals that China's relevant accounting standards need to be standardized,corporate governance is not perfect,and the external audit supervision is not strict and the market supervision system still has a large space for manipulability.Next,from the perspective of companies,investors and creditors explore the economic results of implementing the earnings management in *ST Mall.Finally,we propose effective solutions to the conditions under which *ST Mall can implement earnings management with non-recurring gains and losses.The phenomenon of the case company is not a special case,but a normal state in the capital market of our country.In light of the above analysis,this paper proposes the following recommendations for regulating the similar earnings management practices of *ST company: from the perspective of the external environment,relevant departments should clearly define the relevant concepts in the guidelines,strengthen the supervision of auditing,and improve market supervision;from internal considerations,we must standardize corporate governance,improve the internal system,and improve the quality of personnel.