A Case Study On Earnings Management During The ESOP's Implementation In Honz Pharmaceutical Co.,Ltd.

Employee stock ownership plan is an incentive mechanism,which is designed by enterprise to encourage the development of employee in a long time,improve company's management structure and promote company's stable development.Against the big environment of rapid economic development,more and more listed companies start to participate in conducting employee stock ownership plan in succession.However,with more and more enterprises applying employee stock ownership plan,more enterprises will also begin to try earnings management and as a result,there would be more and more earnings management problems in the implementation process of employee stock ownership plan.Nowadays,because it is relatively late for our country to study the employee stock ownership plan and earnings management,the related theory study is not incisive,profound,and comprehensive and lacks specific practical experience.However,in the past study for academic circle on the existing earnings management problem of employee stock ownership conducted by enterprise,it mainly relies on the method of empirical research analysis to make conclusion while there is less study targeting on specific case to analyze.Hence,when analyzing the existing earnings management problem in the process of the implementation of employee stock ownership plan,it becomes especially important to analyze with the combination of theory and practice.This paper takes the event of the first phase of employee stock ownership plan implemented by Honz Pharmaceutical Co.,Ltd.as the study object and analyzes changes existing in earnings management degree in the implementation process of employee stock ownership plan to study whether before announcement,the listed company have conducted the negative earnings management in the implementation process of employee stock ownership plan and management level operate earnings management to seek private gain.And it infers the motive of earnings management,method and its effect in the implementation process of employee stock ownership plan.With the help of case analysis,it comes to the conclusion that according to the existing problem,the related countermeasures and suggestions are proposed to provide some references in the aspect of implementing employee stock ownership plan and restrain earnings management for related henceforth departments and listed companies.