A Case Study Of~*ST Yihua Of Asset Impairment For Earnings Management

The rapid development of economy has prompted some listed companies to take various measures to improve their profits or avoid possible risks.Due to the imperfection of the asset impairment criteria in China and the greater flexibility and ambiguity of asset impairment,the phenomenon that enterprises use asset impairment for earnings management is becoming more and more common.Appropriate earnings management is legitimate,While bringing benefits to enterprises,it will not harm the interests of other stakeholders.But nowadays,some listed companies carry out excessive earnings management through asset impairment,which makes accounting information distorted and leads to a significant reduction in the reliability of accounting information,and to a certain extent misleads investors’ decision-making.Under this background,how to restrain excessive earnings management behavior in the application of asset impairment accounting has become an important topic which needs to be further explored and studied in this paper.Based on the literature of applied research and case analysis related to asset impairment and earnings management,this paper analyses the relationship between them on the basis of summing up the relevant theories,and then takes*ST Yihua as the research object to make a case study of*ST Yihua.After briefly introducing the basic situation of*ST Yihua,with a certain understanding of*ST Yihua,we use the model to test whether it has earnings management.Then after finding out the motivation of*ST Yihua for earnings management,we analyze the financial data of*ST Yihua from 2013 to 2018,and analyze the economic consequences of*ST Yihua for assets impairment after earnings management.As a result,the paper puts forward relevant countermeasures and suggestions from three aspects:regulatory agencies,investors and enterprises themselves,in order to explore ways to reduce the occurrence of such acts.