Research On Earnings Management Behavior Of Controlling Shareholders Of ZG Company From The Perspective Of Equity Pledge

In recent years,equity pledges have swept the financing market like a tropical storm with the advantages of low cost and high speed.According to statistics,as of February 1,2019,a total of 1,871 listed companies in China's A-share market had not been pledged,and the number of pledged shares was 632.006 billion.The total market value of the pledged shares reached 4.27 trillion yuan.The current disadvantages of sweeping the stock market in the context of equity pledges are increasingly prominent.When the stock market fluctuates,the stock price continues to fall,and even falls below the liquidation line,if the timely remedy is not possible,it will lead to the transfer of control of listed companies.Generally,equity pledge allows the controlling shareholder to obtain the required funds while maintaining the controlling position,leading to the separation of control and cash flow rights,which may conceal the phenomenon that the controlling shareholder obtains private benefits of control.Therefore,the controlling shareholder will have a strong incentive to proceed.Earnings management,with a view to stabilizing stock prices and firmly controlling the company.In order to study the impact of equity pledge on the company's earnings management,this article uses the literature research method and case study method to select the ZG company with the highest equity ratio in the A-share market in 2019 to study the equity pledge case of the controlling shareholder of ZG company,Analyze the company's earnings management behavior after the controlling shareholder's equity pledge and its impact on the company.The main contents of the case study are as follows: First,this article introduces the ZG company's profile and the controlling shareholder's equity pledge status,focuses on the background,process,and characteristics of the controlling shareholder's equity pledge of ZG company,and analyzes the driving force of controlling shareholder's equity pledge.Secondly,it analyzes the mechanism of ZG's controlling shareholder equity pledge to promote the company's earnings management behavior and the company's specific earnings management behavior,and studies the company's operating risk that occurs after equity pledge boosts the company earningsmanagement.Finally,based on the results of the case analysis,suggestions for the company and enlightenment to relevant financial institutions and regulatory authorities are put forward.The following conclusions are drawn based on the contents of the above case studies:(1)The motive of the equity pledge of the controlling shareholders of ZG company is to solve the funding needs of financing and investment,meet the controlling shareholder's own risk reduction and at the same time carry out the interest appropriation;(2)ZG company holding A high proportion of shareholders' pledge of equity will have a negative impact on the company's stock price;(3)The controlling shareholder's equity pledge will promote the company's earnings management behavior,and long-term earnings management will lead to poor internal operations of the company,which will cause risks such as financial crisis;(4))A high percentage of equity pledges may induce controlling shareholders to invade the company's interests;(5)From this case study,we can draw suggestions for the optimization of the company 's external supervision and internal governance,as well as for small and medium shareholders,financial institutions,and regulatory agencies.Bring corresponding enlightenment.