Research On Non-recurring Profit And Loss Earnings Management

With the registration system and the science and technology board coming soon,the quality of information disclosure has received wide attention from all walks of life.Non-recurring gains and losses are used to reflect the one-time,sporadic gains or losses in the business.If the non-recurring gains and losses are too high,investors will not be able to effectively predict the future valuation of the company based on the information disclosed.At present,the net profit indicator is one of the core indicators used to measure the operating results and financial status of listed companies.Therefore,it is the most concerned indicator for the majority of tradable shareholders,creditors and company management.However,in order to truly reflect the core competitiveness and sustainable operation of the enterprise,it is necessary to consider the factors that affect the net profit unless the recurring profit and loss.Under the current regulations,some listed companies use non-recurring gains and losses to manipulate financial profits,and the financial data obtained are seriously distorted,affecting the analysis and evaluation of report users and making major investment decisions,which has become a stumbling block to the healthy development of China's capital market.Non-recurring gains and losses are difficult to accurately define in accounting practice,and the manipulation is concealed.The disclosure of enterprises is not standardized.In particular,*ST companies use non-recurring gains and losses to achieve the purpose of turning losses into profit and removing *ST caps.On the theoretical level,this paper compares the literature and development status of non-recurring gains and losses at home and abroad.the closely relationship of the resumption of listing in the *ST system and non-recurring gains and losses.This paper introduces the overall situation of China's *ST companies and compares different ways of handling the content scope and disclosure requirements of non-recurring gains and losses at home and abroad,describing the conventional means of earnings management of listed companies in China,the management methods of earnings,measurement standards and definitions.According to the sample statistics of China's delisting system,the situation of excess stock supply and delisting in China was analyzed.It established relationship between the requirements of the Auditing Standards for CPAs,non-standard audit reports leading to the termination of listing and the non-recurring gains and losses defined in the Accounting Standards for Business Enterprises.This article takes the failing of *ST Xindu earnings management,which led to the delisting as the background.In the past,the research on non-recurring gains and losses was limited to the accounting field,but did not expand to the scope of audit.*ST Xindu's earnings management is different from the 20 non-recurring profit and loss according to the “Interpretive Announcement of Corporate Information Disclosure of Public Offering Securities”.it is listed as the 21 st items-others,which is more difficult to define in auditing practice and need to be defined by policy makers.The existence of controversy has greater concealment and operability,which is the focus of future supervision and prevention.The incompleteness and information asymmetry of non-recurring profit and loss system leads to the achievability of *ST's non-recurring profit and loss earnings management.On the basis of the analysis of the criteria,the irregular operation of *ST Xindu over the years is analyzed.*ST Xindu Company violates the rules for major shareholder guarantees and major related party transactions,resulting in failure to fulfill the expiring contracts and non-recurring items regularly.In this case,the reason is that the major shareholders hollow out listed companies and potential related parties occupy funds.Then,*ST Xindu is to meet the conditions for resuming the listing,it adjust the profit through non-recurring gains and losses.Which led to the contradiction between Tianjian and Daxin,two accounting firms,and the audit opinions were inconsistent.After the CSRC made an authoritative determination,the two firms overturned their before audit opinions,fully explaining the concealment and future regulatory trends of the case.As a results *ST new delisted.From the case itself,the deep-seated issues worth considering include the definition of the auditor's responsibility and the definition of the non-recurring profit and loss project.Finally,in the final analysis,the issue is the current stock issuance and delisting system,the chairman of the China Securities Regulatory Commission,Yi Huiman,said at the 13 th National People's Congress that “to establish of the science and technology board and to pilot registration system”,the loss-making enterprises can also be listed,and it will resolve that the company's motives for the regulation of non-recurring gains and losses from the system,protect small and medium investors.The establishment of a prior payment mechanism will help to stop adjusting profits with the non-recurring gains and losses in essence.