Earnings Management Of Backdoor Listing Based On Performance Commitment

With the development of our capital market merger and reorganization,many enterprises hope to obtain financing channel through listing,in order to improve the speed of listing,many enterprises choose backdoor listing.However,due to the elongated queue time of registration system,the increasingly fierce congestion of enterprises IPO listing,time is great for IPO listing,and backdoor listing has a certain time advantage.In order to ensure the fairness of backdoor listing transactions,avoid the phenomenon of "buying high and selling low",and ensure the rights and interests of minority shareholders,the backdoor listing agreement usually contains performance commitment clauses.Many enterprises fulfill performance commitments by optimizing performance through earnings management,but such behavior is contrary to the original intention of making performance commitments.Therefore,in backdoor listing,Both performance commitment and earnings management are worth exploring.In this paper,existing literatures on backdoor listing,performance commitment and earnings management are sorted out.Based on information asymmetry theory,signal transmission theory and contract theory,theories and cases are combined to conduct earnings management analysis on specific cases of performance commitment in backdoor listing of Aixu Stock,including: First,it introduces the basic information of the two parties of backdoor listing,the implementation process of backdoor listing and performance commitment,and analyzes the reasons for their substandard performance.Second,the modified Jones model is used to test whether there is earnings management behavior during the performance commitment period of Aixu shares,and the degree of earnings management is measured according to the absolute value of the manipulated accruals.Meanwhile,the longitudinal comparison analysis is made between the manipulated accruals and the industrial average.Thirdly,combined with the theoretical basis listed in this paper,the motivation of earnings management is analyzed from four motivations: achieving performance commitment goals,high performance valuation,avoiding being regulated and increasing market share price.Fourthly,the earnings management mode of Aixu Shares during the performance commitment period is analyzed in detail,respectively from the means of increasing income and reducing cost.Fifth,firstly,the event study method is adopted to analyze the reaction of Aixu’s performance promise release date and the first year’s performance promise forecast date to the stock price in the capital market.Secondly,the financial data of Aixu’s financial data are analyzed in three dimensions,namely "efficiency,profit and growth",and the economic consequences of earnings management during the performance promise period are analyzed from the perspectives of market response and financial response.Finally,this paper draws the following conclusions: First,earnings management behavior does exist in the performance commitment period;Second,backdoor listing and performance commitment make enterprises have the motivation to carry out earnings management;Third,through earnings management,the enterprise tries its best to fulfill the performance commitment target and reduce the enterprise loss;Fourth,earnings management only brings short-term positive effects to enterprises,which is not conducive to long-term development of enterprises.Based on the above conclusions,this paper puts forward two suggestions for corporate earnings management,namely,formulating reasonable performance commitment agreements and strengthening the supervision of relevant departments.