Study On Earnings Management Behavior Of LA Information Technology Company

Since the concept of earnings management was put forward in 1984,the academic discussion on this behavior has never been interrupted.Our country is in the rising period of economic development,and the relevant system is not perfect,which leads to some listed companies using various means to manage earnings.Earnings management itself is not a bad behavior,but the management of listed companies use earnings management to manipulate profits,resulting in the disclosure of financial statements information is not true,affecting the judgment of investors,causing adverse effects,which will affect the normal market order.The common earnings management behavior mostly uses the related party transaction,the accounting policy and the accounting estimate change,the assets reorganization,the income expense confirmation and so on methods,these methods all can have the influence to the enterprise's actual profit.LA information technology company is the first Internet video company to be listed in China.At the beginning of its listing,its profits soared,which was once called the "miracle" of the industry.However,in 2017,it was exposed to financial crisis,and the management was changed.There were earnings management behaviors by means of equity pledge,a large number of deferred income tax assets,related party transactions,etc.,which affected the company's credit level,It not only makes the company's operating income drop sharply,but also causes a huge loss.Some scholars also question the company's sustainable operation ability.This paper combines the stakeholder theory and incomplete contract theory,uses the data comparison and analysis to analyze the financial data of LA information technology company from 2014 to 2018.Some of the data analysis to 2019.Although the early financial statements of LA information technology company seem to be flawless,this is not the real business situation of the company.As early as 2014,its real profit quality was In the three years from2014 to 2016,part of the data in the financial statements of LA information technologycompany grew strangely,and there were untrue earnings management behaviors,which made its future operation very risky.Combined with the data,this paper focuses on the impact and consequences of equity pledge,recognition of deferred income tax assets and related transactions on the earnings management of LA information technology company,and finally gives suggestions.