Case Study On Reduction And Earnings Management Of Zhangzi Island Major Shareholders

Over the past 40 years of reform and opening up,China's GDP has grown by 29 times and per capita GDP by 20 times,becoming a major driver of world economic growth and achieving great achievements in economic development.The securities market has made a great contribution to the national economy,playing an important role in financing,asset pricing and capital allocation.In the active stock market,the earnings information of listed companies becomes the key for investors to decide whether to invest.Investors' functional locking of earnings information makes earnings management the main means for many listed companies to whitewash their financial statements.In particular,listed agricultural companies have frequently damaged the interests of investors through earnings management in recent years,which to some extent has undermined the confidence of market investors in listed agricultural companies.For further study of the causes of frequent agricultural listed companies earnings management,and explore to strengthen agricultural surplus information disclosure of listed company supervision countermeasures,this paper selected the roebuck island company as object of case study,hope that through the method of case study in-depth analysis roebuck island the reasons behind the company's earnings management behavior,to improve agricultural class regulation of listed companies to provide the theory and practice basis.By combining case study with normative study,this paper studied the earnings management process of Zhangzi Island company using the impairment provision of seabed biological assets and the behavior of major shareholders to reduce their holdings.First to domestic and foreign scholars about earnings management and major shareholders holdings combed summarizing the related literature and theory,on the basis of the selected case roebuck island group of listed companies as the research object,and introduced the background and related system of the company's major shareholders holdings roebuck island "scallops run road" event,the basic situation of the second combination roebuck island of the company's financial position and "scallops run road" market reactions before and after the event,the motive of earnings management,key research roebuck island operation means of earnings management,the cause of the major shareholders holdings and transaction time,The comparative analysis method,factor analysis method and event study method were used to analyze the cash flow,operating capacity,development capacity,debt paying ability and profitability of zhangzi island,and the relationship between earnings management and major shareholders' selling behavior was found.Finally,on the basis of case analysis,the research conclusions are drawn and countermeasures and Suggestions are put forward for the stakeholders.Through case analysis,the following conclusions can be drawn :(1)Zhangzi Island's earnings management by taking advantage of the "scallop running away" incident has brought a very negative impact on the company.Through the analysis of the event study method,it is found that from the initial strong reaction of investors to the "common occurrence" of the latest event,the share price of Zhangzi Island has also dropped from the high price of agricultural hundredth yuan to the historical low of 2.3 yuan/share.(2)avoidance of ST and delisting is the main reason for zhangzi island's earnings management.Since 2014,the company's net profit has shown the characteristic of "a big loss in two years and a small profit in one year",which is facing the risk of being delisted by ST and delisted.(3)the potential risks and supervision difficulties of submarine aquaculture make Zhangzi Island company frequently carry out earnings management.Zhangzi Island company has made impairment provision and write-off for seabed inventory for many times to change the company's earnings information.(4)the controlling shareholder and the second largest shareholder of zhangzi island use earnings management to reduce their shares of the company.Shareholders of listed companies always reduce their shares near the company's performance forecast,and tend to reduce their shares after the good news is disclosed,and reduce their shares before the bad news is disclosed.Zhangzi Island shareholders' reduction also conforms to this phenomenon.According to the research conclusion,the following Suggestions are proposed to relevant parties :(1)improve the audit method of agricultural,forestry,animal husbandry and fishery enterprises.(2)detailing the information disclosure system of listed companies.(3)improve the delisting system of ST company.(4)to strengthen the punishment of enterprises that violate the rules.