Earnings Management Research Based On Minority Shareholders Profit And Loss Perspective

With the continuous development of China’s capital market and the gradual improvement of the legal system,the regulatory efforts for information disclosure of listed companies have been continuously strengthened,and the quality of information disclosure has also been significantly improved.However,some listed companies still take some more covert methods,such as reducing the minority shareholder’s profit and loss to adjust net profit attributable to shareholders of the parent company in the consolidated income statement and implement earnings management.Although these behaviors comply with regulations,they may affect the authenticity and reliability of the company’s financial statements.Therefore,identifying the methods of earnings management and their impact on profits can better help external investors understand the true business and financial situation of the company,and make more informed investment decisions.This article takes Hangzhou SILAN Microelectronics Co.,Ltd.as a case,using theoretical research methods to elaborate on the concepts and theories related to earnings management and minority shareholder’s profit and loss,briefly introduce SILAN Micro’s basic situation,and analyze its equity structure,business model,and profitability.Based on this,starting from the accounting item "minority shareholder’s profit and loss",the article compares SILAN Micro’s minority shareholder’s net asset return rate with the attributable parent company’s net asset return rate from 2017 to 2021,and finds significant differences between these two rates.Based on the analysis of profit and debt,the article summarizes the three major motives for earnings management: regulatory compliance,debt contract,and equity financing.Analyzing major events such as SILAN Micro’s asset restructuring and related transactions,the article concludes that the earnings management behavior is achieved through the sharing of losses by minority shareholders,the acquisition of minority shareholder’s equity when the subsidiary company turns around losses,and reverse transactions between the parent and subsidiary companies.Finally,the article proposes suggestions for strengthening investor screening ability,regulating internal controls of enterprises,and increasing the supervision of third parties,in order to regulate the company’s earnings management behavior.This article provides a new perspective to help investors objectively evaluate the financial reports of listed companies and better assess the company’s value so that provides some reference experiences for the standardization and sustainable development of the semiconductor industry.It also aims to enhance market transparency and regulatory efficiency to promote investor protection and the healthy development of the market.