Research On Listed Companies Using Government Grants To Earnings Management

In recent years,local governments have increased grants for listed companies in order to promote regional economic development and establish a good investment environment,and the grants are sustainable.According to the "Accounting Standards for Business Enterprises No.16-Government Grants",most government grants received by listed companies can be directly included in the income statement.With the increasing scale of government grants,wide coverage,and good sustainability,this has led to a special phenomenon of earnings management in Chinese listed companies – some listed companies use government grants to increase profits and improve company performance.In this context,this paper attempts to explore how listed companies use government grants for earnings management,reveal problems and propose relevant countermeasures through normative research and case studies.First of all,this paper introduces the research background,research purpose and significance,reviews the literature related to government grants and earnings management at home and abroad,understands the current research status,and expounds the research content,methods and innovations of this paper.Then,from the government grants,earnings management,government grants and earnings management,the relevant theoretical foundations are summarized.Secondly,on the basis of theoretical analysis,based on the 2012-2017 new and old government grants accounting standards linked to the annual report data of listed companies,the current situation of the government grants of listed companies and the overall situation of listed companies using government grants for earnings management.Thirdly,based on the content of the current situation analysis,choose BOE as a case company,specifically analyze BOE's use of government grants for earnings management,including specific behaviors and implementation effects,and explore the problems revealed by BOE using government grants for earnings management.Finally,based on theoretical research and case studies,combined with the problems,the company regulates the use of government grants for earnings management of listed companies,and puts forward some countermeasures and suggestions.The study found that:(1)the scale of government grants is large,the coverage is wide,and the frequency is high,which provides conditions for listed companies to manage their earnings;government grants occupy a high proportion of the total profits of listed companies,helping some loss-making companies turn losses,and government grants have indeed become Some listed companies carry out the “reservoir” of earnings management;(2)listed companies use government grants to improve performance,meet the requirements of the listing system,use deferred income subjects for earnings management,and R&D expenditures will also affect government grants and earnings management..Government grants have a greater impact on the current performance of listed companies and have no positive impact on long-term performance.(3)The new government grants accounting standards have a certain inhibitory effect on the use of government grants for the earnings management of listed companies,but there are still defects.Based on the above conclusions,the article finally puts forward relevant suggestions from three aspects: listed companies,local governments and regulatory agencies.