Research On The Impact Of Performance Commitments On The Target Company's Earnings Management

In recent years,China's comprehensive national strength has been continuously improved and the domestic economy has been developing rapidly.In order to achieve more comprehensive development,more and more enterprises choose mergers and acquisitions to realize the new development model.Under the influence of information asymmetry and future uncertainty,acquirers often sign performance commitments with the target companies to protect their own interests.However,China's current relevant accounting standards and systems are not perfect,in order to avoid huge compensation,when the performance pressure is greater,the target enterprises tend to choose the way of earnings management to inflate profits.Earnings management is usually through the use of related party transactions,accounting policy changes,and to implement the behavior such as affirm income ahead of schedule,the earnings management behavior will obviously detrimental to the reliability of enterprise financial tabulated data,as well as negative influence on the listed company,the target company's own long-term development also can produce a lot of adverse effects.This paper mainly takes the Suzhou Meishengyuan Info Technology Co.,Ltd.as the research object,and explores the performance commitment signed by both parties after the acquisition of Suzhou Meishengyuan Info Technology Co.,Ltd.,which leads the target company to conduct earnings management in order to complete the agreed profit target.At the beginning of this article,by introducing the performance commitment and earnings management between the background information and research significance,this article will further combined with commitment to performance and earnings management theoretical basis,research literature,analyze results commitment and earnings management between the two new research point,enterprises as the research object,the target is to guarantee performance and earnings management behavior between research provides a new perspective.By analyze financial index of target company,the study found that:the cohesion of culture and the performance of target company by signing commitment,in a short period of time,could produce certain incentive effect,but high performance pressure also induce earnings management behavior,which also lead to a series of side effect.