Research On The Earnings Management Behavior Of *ST Companies Under The New Delisting Rules

Compared with mature capital markets such as Europe and the United States,China’s capital market started late,companies apply for listing cycle,strict control,resulting in a scarcity of "shell resources’ ’,companies in order to preserve surplus management,the market frequently appeared " shell companies,zombie companies,undead birds’ ’ and other phenomena.Under the background of accelerating the reform of registration system,our country also pays more attention to improving the quality of listed companies,promoting the regularization of de-listing mechanism and accelerating the survival of the fittest in the market.At the end of 2020,the Shanghai and Shenzhen exchanges made major adjustments to the delisting rules,optimizing the diversified index system for forced delisting,streamlining the delisting process and further tightening the supervision of delisting.Through combing through the existing literature,this paper finds that there are many researches on the withdrawal system and *ST company earnings management behavior at home and abroad.However,there are few case studies combining the above two aspects and the impact of withdrawal system to analyze *ST company earnings management behavior,especially after the major adjustment of our withdrawal system at the end of 2020.Therefore,this paper takes ST Jiuyou as a case study,based on the withdrawal rules and earnings management theory,analyzes whether ST Jiuyou has excessive earnings management behavior after the withdrawal risk warning is implemented,and further analyzes and sorts out the motivation,means and economic consequences of ST Jiuyou to improve earnings management to help the company in the implementation of the new regulation.Based on the case study of ST Jiuyou,the following conclusions can be drawn: First,ST Jiuyou managed earnings by manipulating non-recurrent profit and loss and manipulating credit impairment loss,which helped the company avoid delisting crisis in 2020.Secondly,ST Jiuyou’s earnings management behavior can help the company to retain its listing qualification in the short term,but it has not brought significant improvement to the company’s going concern ability in the long run.Third,while the new delisting rules reduce the effectiveness of earnings management of listed companies using non-recurring gains and losses,they still provide a buffer for *ST companies,reducing costs,manipulating asset impairment provisions and other more subtle earnings management techniques still apply.Based on the conclusions obtained,the following revelations are made: First,*ST should concentrate on improving the operation of its main business and improving its internal governance structure.Secondly,the supervisory authorities should further optimize the withdrawal system according to the current situation,increase supervision and punishment,so that the withdrawal rules can be effective;Third,investors should keep thinking rationally in the investment process and avoid following the blind speculation as much as possible.