A Case Study On Earnings Management Of Xiamen Savings Environmental Co.,Ltd.

The earnings management of listed companies in China is often related to the policies of rights issue,special treatment,delisting,and so on.The main means are the manipulation of assets reorganization,related party transactions,asset impairment,accounting policy choice,tax preferences and financial subsidies,and so on.After 2001,with the revision of the accounting standards,the promulgation of the interim provisions on Accounting treatment such as the sale of assets between related parties,and the provisions on deducting the impact of non-recurrent gains and losses on the calculation of the rate of return on net assets,It has greatly squeezed the space of earnings management of listed companies.In the increasingly standardized accounting environment,the financial restatement which uses major accounting errors to correct and adjust profits is gradually becoming the "new favorite" of listed companies.By taking the case of Savings company as the research sample,this paper probes into the whole process of earnings management and its consequences by using the correction of major accounting errors in Savings company.It also analyzes the motivation of correcting the major accounting errors and the characteristics of accounting policies,information disclosure and governance structure of the three dimensional silk company.The choice of this case is of theoretical and practical significance.First of all,this paper describes the basic situation of earnings management in Savings company: the organizational structure and equity structure of the company,as well as the main business state,especially expounds the process of correcting two major accounting errors in Savings company.And the impact of earnings management through correction of major accounting errors,accounting firms are unable to issue audit reports,resulting in regulatory penalties and a fall in the company's share price.Secondly,this paper analyzes this case.On the basis of analyzing the motivation of earnings management in Savings company,this paper discusses the relevant accounting policies involved in earnings management by using major accounting error correction in Savings company,and verifies the quality of information disclosure in Savings company.And from the ownership structure,Directors,supervisors,senior managers changes and audit and other special committees to carry out the implementation of corporate governance analysis.Finally,the following conclusions are drawn from the case study:(1)the performance commitment brought about by asset restructuring is the main motivation of earnings management,and it is easy to generate huge goodwill under the performance commitment.(2)the correction of major accounting errors has become an important manifestation of earnings management,and its direct performance lies in the choice of accounting policies,especially the recognition of income.(4)strengthening the construction of the special committee of the board of directors and giving full play to its professional functions,the quality of the annual financial report information disclosure and the compliance of related party transactions.Improve the quality of corporate governance and financial information disclosure.To sum up,the governance structure of Savings Company changes frequently,the quality of information disclosure is not good,and driven by performance commitments,earnings management by using major accounting errors correction is punished and investigated by the supervisory level.The case study serves as a warning to other listed companies.