Research On The Earnings Management Issues Of Listed Companies In Financial Distress

With the increasingly fierce market competition,in order to establish a foothold in the capital market,listed companies in China will use different means to adjust the surplus in order to transmit good signals in the market.According to the research results of the existing literature,financial distress is one of the reasons for the earnings management of listed companies in China.Financial distress will indicate that the company's market performance is not good,directly affecting the company's credit level and stock prices.In this case,companies are likely to use earnings management to adjust profits.Based on this status quo,this paper analyzes whether listed companies with financial distress will implement earnings management activities and choose which means to implement earnings management.First,this paper selects the financial data of A-share listed companies in 2013-2017,and uses the modified Jones model to estimate accrued earnings management,uses Roychowdhury(2006)model to estimate real earnings management,and draws on Altman's Z-Score model to estimate corporate financial distress.Secondly,according to the critical value of Z,the overall data is divided into three groups,which are financially sound,financially unstable and financial situation is on the verge of bankruptcy.Finally,the above data are subjected to regression analysis to study the earnings management problems under different financial conditions.The results of the study indicate that the three groups represent enterprises with good financial status,unstable financial status,and financial status on the edge of bankruptcy.There are accrued earnings management problems.Enterprises with financial status on the edge of bankruptcy are compared with the former two and accrued earnings management.The degree of negative correlation is stronger,and the implementation of accrued earnings management is more significant.From the perspective of real earnings management,enterprises with good financial status and unstable financial status have fewer real earnings management activities,and enterprises with financial positions on the edge of bankruptcy have more obvious real earnings management activities.According to the research results of this paper,most companies have implemented these two types of earnings management.Among them,accrued earnings management has not been reduced with the continuous improvement of accounting standards.Due to the fact that real earnings management damages the long-term business performance of enterprises,most enterprises have limited utilization.