Research On Earnings Management Of Controlling Shareholders Before And After Equity Pledge

In recent years,as a new financing method,equity pledge has been favored by listed companies because of its simple handling and easy operation.It once became the first choice to solve the financing problems of listed companies.In order to obtain more financing,listed companies are likely to carry out earnings management before equity pledge.Although equity pledge has many advantages,it inevitably has some risks.After the equity pledge,if the stock price continues to decline,it will lead to the decline of the value of the pledge,and then there will be a position closing crisis and even the risk of control transfer.Based on this,in order to maintain the controlling position,the controlling shareholders of high proportion equity pledge usually carry out some operations during the period of equity pledge to stabilize the stock price and boost the confidence of investors.Manipulating performance through earnings management is a common means.Therefore,it is of practical significance to study the earnings management behavior of controlling shareholders before and after equity pledge.This paper combs the relevant literature of equity pledge and earnings management,and summarizes the change mechanism of earnings management before and after equity pledge on the basis of information asymmetry theory and gone theory.In the case part,this paper selects Jiu’An medical as the research object.After introducing the relevant contents of the controlling shareholder’s equity pledge,this paper analyzes the different earnings management motives before and after the equity pledge,and then identifies the earnings management behavior of Jiu’An medical before and after the equity pledge through the modified Jones model,including the capitalization of R&D expenditure before the equity pledge,the accrued earnings management of depreciation of fixed assets,and the government subsidy after the equity pledge Finally,the analysis of the impact of equity pledge on the authenticity of earnings management.The results show that under the background of controlling shareholders’ equity pledge,listed companies usually have earnings management behavior.Before equity pledge,listed companies prefer low-cost accrued earnings management.After equity pledge,listed companies choose more hidden real earnings management.It is hoped that this study can provide reference for listed companies with controlling shareholders’ equity pledge,and improve the ability of external investors to identify the earnings management behavior under the controlling shareholders’equity pledge.