A Case Study On The Earnings Management Of Chu Ying AGRO-pastoral Group

Earnings management is common in the processing of financial statements of listed companies because of the flexibility of the accounting system.It has always been a hot topic for scholars at home and abroad.It is different from financial fraud,and earnings management is carried out within the limits set by accounting standards and laws.The level of profit will affect the salary of managers,and it is also the most basic and intuitive data reflecting the business situation of the company.The government taxation is also closely related to the profits of the company.It is precisely because the surplus has such an important role that listed companies will find ways to control the surplus,which leads to the phenomenon of earnings management becoming more and more common.This paper uses case analysis method to analyze the case company "China's first pig raising" Chu Ying AGRO-Pastoral Group(stock code: 002477),it is a listed company on the Shenzhen Stock Exchange.Because of its unusual changes in its 2017 profit,it is suspected that it may have earnings management behavior.In the main part of the second chapter,I first introduced the basic situation of Chu Ying AGRO-Pastoral Group,and explained the reasons for choosing it.Then,the paper analyzes the current situation of animal husbandry,and uses financial data to analyze the solvency,operational capacity and profitability of Chu Ying AGRO-Pastoral Group in 2015,2016 and 2017,and select companies in the same industry for comparison.I speculate that the business status of Chu Ying AGRO-Pastoral Group is not good,and there is a motive for earnings management.The third chapter mainly explores the specific operation of its use of investment income for earnings management.Including complex and huge investment transactions,as well as the funds raised for the expansion of production and operation of enterprises for investment activities,through the resale of pig houses will become their own funds,and the return on investment will turn into a profit.At the same time,when it sells non-current assets,it also gains non-operating income,which can also increase the current net profit.Based on the case analysis of the management of the eagle peasant husbandry and pastoral surplus,this paper puts forward the following suggestions.The earnings management of the Chu Ying AGRO-Pastoral Group is ingenious and the effect is obvious.Other listed companies can adjust on the basis of their own characteristics.However,it should also be noted that earnings management behavior has both benefits and risks,such as insufficient disclosure of information on listed companies,and it is easy to turn into financial fraud.For external information users,earnings management is confusing.It will affect the behavior of investors to a certain extent.This paper recommends that external report users improve their ability to understand financial reports and broaden access to information to improve investment efficiency and reduce risk.For government regulators,earnings management is still in a reasonable and legal scope.The government can only supervise from the perspective of information disclosure and control abnormal transactions in earnings management behavior to ensure the interests of external information users.For accounting standards,the earnings management behavior of listed companies provides guidance to relevant departments.It has a positive effect on promoting the progress of China's accounting standards.