Research On Earnings Management Of High-tech Enterprises Under Equity Pledge Of Controlling Shareholders

China’s economy is shifting from high growth rate to high quality development.As the main body of scientific and technological innovation,high-tech enterprises(referred to as "high enterprises")play a key role in China’s economic construction.However,different from traditional industries,high-tech enterprises have the characteristics of high risk,which is contradictory to the business requirements of banks and other financial institutions to control the lending risk.At the same time,the endogenous financing of enterprises is far lower than the financing target of high-tech enterprises,so high-tech enterprises focus on equity pledge.In particular,high-tech enterprises not only have a generally high price/earnings ratio,but also in the capitalization of research and development expenses and other aspects of the financial classification is quite distinctive,there are various earnings management loopholes.In this way,the controlling shareholders are forced to stabilize the stock price and their own control,after equity pledge or earnings management.At present,there are few literatures in the academic circle to study the earnings management behavior commonly adopted after equity pledge,as well as the impact on enterprises and other details.Based on this,this paper chooses Zhongjing Electronics as a case study to explore the ways in which equity pledge of controlling shareholders of high-tech enterprises affects earnings management.This paper first reviews the research results of equity pledge and earnings management,explores the mechanism of the chain reaction of earnings management under the equity pledge of high enterprises based on the existing theoretical basis of incomplete contract,and then introduces the case company--Zhongjing Electronics,reviews the process of its equity pledge,and analyzes the earnings of the controlling shareholders of Zhongjing Electronics during the equity pledge period.On this basis,the revised Jones model and Roychowdury model are used to calculate the degree of accrual and real activity earnings management before and after the equity pledge of Zhongjing Electronics.After confirming the existence of earnings management,the motivation of the equity pledge driven earnings management of Zhongjing Electronics is analyzed,and the specific earnings management behavior is analyzed through the company’s annual report and other data.Finally,the results of earnings management under the equity pledge of the controlling shareholders of Zhongjing Electronics are analyzed from the perspective of operating results and enterprise value by using the relevant financial indicators.Based on the above analysis results,this paper finds that the controlling shareholders of Zhongjing Electronics carry out corresponding earnings management through accrual earnings management(including control of operating costs,use of bad debt reserve)and real earnings management(reduce discretionary expenses)after equity pledge,and that the enterprise’s operating performance and enterprise value are negatively affected to varying degrees after earnings management.Based on this,this paper puts forward the following countermeasures to restrain earnings management of equity pledge: first,to promote high-tech enterprises to optimize their ownership structure and reduce the chain reaction of earnings management caused by their pledge;Second,it pays attention to the operation and financial situation of the enterprise after the shareholding pledge of the controlling shareholder,which helps to identify relevant risks in a timely manner.This will provide reference for more high-tech enterprises before and after equity pledge.