Research On The Impact Of Listed Companies’ Goodwill And Its Impairment On Corporate Earnings Management

In recent years,with the rapid development of China’s economy,pressure from changes in economic growth mode and industrial structure has prompted enterprises to become increasingly active in mergers and acquisitions.At the same time,goodwill problems arising from mergers and acquisitions have also attracted widespread attention in the capital market.Especially in recent years,the phenomena of "taking a big bath" and "thunderstorms" frequently broke out in the capital market,which further triggered in-depth thinking of goodwill valuation,goodwill impairment accrual and surplus management.Based on the above background,this paper takes Tianshen Entertainment as a research case,first analyzes the rationality of goodwill valuation and goodwill impairment motivation of listed companies in mergers and acquisitions.Secondly,it analyzes whether the amount of goodwill impairment accrued is appropriate.Finally,by analyzing and summarizing how Tianshen Entertainment uses goodwill impairment for earnings management,it can provide better monitoring suggestions for regulators,alert the majority of enterprises to be cautious about goodwill valuation and its impairment,and also remind small and medium-sized investors to predict goodwill impairment risks.Firstly,this paper briefly introduces the background and purpose of this research,the literature review and research methods.Secondly,the related concepts are given in combination with this article.It defines the relevant concepts,expounds the earnings management theory,the principal-agent theory,the optimal contract theory and other basic theories.Furthermore,the article discusses the conditions for the earnings management of listed companies using goodwill.By expounding the general status of listed company’s goodwill and the present situation of goodwill impairment,this paper analyzes the outstanding problems faced by listed company’s goodwill impairment-the increase of the amount of the enterprise to calculate the goodwill impairment.Based on the analysis of the specific cases,this paper analyzes the general situation of the operation of the listed company of Tianshen Entertainment,the events of continuous M & A,and the formation of goodwill in Tianshen Entertainment.Additionally,this paper further analyzes the behavior motive and consequence of earnings management of the listed company.Finally,the conclusion and suggestion are drawn: the listed companies use M & A premium to generate goodwill to provide opportunities for earnings management,corporate governance and subsequent impairment test for earnings management to create space for earnings management,goodwill impairment earnings management will eventually harm the interests of minority shareholders;listed companies should rationally M & A,reasonable valuation,establish and improve internal control system and corporate governance structure,and improve the subsequent measurement of goodwill impairment and information disclosure system.