The Study On Earnings Management Of Non-recurring Income And Loss

With the rapid development of China's securities market,relevant regulatory authorities have issued a series of targeted laws and regulations in order to conduct in-depth and effective regulation and supervision of the market.The delisting risk warning system is to urge*ST company to improve the business situation of enterprises and remind investors of the risks of investing in such companies.The delisting risk warning system has brought positive effects to China's stock market after its introduction,but everything has its two sides,and it also brings many new problems during its implementation.As the "shell" resources of listed companies have always been relatively valuable in China,many listed companies which have been warned by delisting risk conduct earnings manipulation through non-recurring items in order to ensure that they will not be delisted.Although the securities regulatory authorities are constantly revising and improving the system of delisting*ST company,they have not alleviated the unreasonable earnings management behavior,and even become more serious.This paper takes*ST Yaxing as the research object,after summarizing the literature and theoretical basis of earnings management,analyzes and studies its profit manipulation by using non-recurring items in 2016.This paper analyzes the financial statements of*ST Yaxing from 2014 to 2016.its net profit in 2014 and 2015 is negative for two consecutive years,and it was processed by*ST in 2016.The analysis found that Yaxing chemical used non-recurrent items to manipulate net profit into profit and net assets into negative positive in 2016.through manipulation of non-recurrent profits and losses,*ST Yaxing avoided being suspended from listing,but its earnings were not sustainable,and its operating situation did not improve very well in the years after the stars were removed.In order to better explain the problem,this paper also chooses 36*ST companies which successfully removed their caps in 2017 to support the case,which proves that it is very common to use non-recurring items for earnings management.Through the analysis,the following conclusions can be drawn:in order to avoid being suspended from listing for three consecutive years,ST company will more choose to use non-recurring items to manipulate profits for earnings management;*ST company's behavior of earnings management in order to achieve the expected purpose is fundamentally related to the imperfection of delisting system in China.Finally,the article puts forward some suggestions on excessive earnings management of listed companies.Relevant departments should improve China's delisting system,strengthen securities market supervision and improve the quality of company managers,so as to better promote the healthy and stable development of China's securities market.This article hopes that through the analysis of*ST Yaxing,we can better reveal the unhealthy phenomenon of using non-recurring gains and losses to manipulate earnings in China's stock market,and try to find a better way to effectively constrain this immoral behavior.