Research On Earnings Management Of R & D Expenditure Capitalization Of North China Pharmaceutical

2019 is the first year of 5G in China.China has taken the lead in mastering core technologies,which will promote the construction of smart cities in China.In the era of high-tech technologies such as 5G,3D printers,sweeping robots,and artificial intelligence,according to China's innovation-driven strategy,research and development expenditures were included in the GDP calculation in 2016.Although the current new accounting standards,the accounting treatment of R&D expenditures has been converted to eligible capitalization through full expense conversion to encourage enterprises to actively invest in R&D.Although the new standard fills some deficiencies,there are still shortcomings,and the operability at the time of capitalization of R&D expenditures is poor during actual implementation,so that corporate profit manipulation is highly likely.We have found that some technological innovation industries,especially the pharmaceutical manufacturing industry,will vaguely deal with R&D expenditures in accordance with the new loopholes in the capitalization of R&D expenditures.In order to adjust profit information,some measures may be taken,such as artificial control of capitalization rate.Therefore,research on the use of R&D expenditures for earnings management is of practical significance.This article combines theory and case studies.On the theoretical side and on the basis of in-depth research of domestic and foreign literature,this article analyzes the behavior of enterprises adopting different R&D expenditure accounting methods for earnings management,and the motivation and identification methods of earnings management using this method.On the case side,this article defines the company's earnings management behavior as neutral,selects North China pharmaceutical companies whose industry type belongs to the pharmaceutical manufacturing industryas the case enterprises,first uses the experience identification method to research the R&D expenditure business activities,and then uses the earnings management measurement model to measure earnings Degree of management,and concluded that there is a certain degree of artificially adjusted earnings management for the capitalization rate of R&D expenditure in North China Pharmaceuticals;based on the existence of earnings management,the results analysis and trend judgment of the financial data of the company are found,and it is found that The motivation of earnings management is debt contract motivation,income smoothing motivation,capital market motivation,and compensation contract motivation;and analyzes that excessive capitalization will put pressure on the company's profits in the next few years,cause more research and development,and increase the company's financial risks.Then North China Pharmaceuticals uses the problems revealed by the capitalization of R&D expenditures and proposes relevant policy recommendations for the problems found: formulate specific operating standards for the capitalization of R&D expenditures;strengthen auditing efforts;enhance the integrity and accuracy of the disclosure of R&D expenditure information;Additional project research and development Failure treatment.In order to meet the era of Industry 4.0,the wider development space that comes with it has brought to the pharmaceutical manufacturing industry and also brought pressure for transformation.Therefore,the research in this article can provide relevant suggestions for pharmaceutical companies,standardize the accounting treatment of R& D expenditures,reduce false information disclosure,and thus enhance the competitive advantage of pharmaceutical companies.