Research On Earnings Management Behavior And Supervision Of Listed Companies On The Verge Of ST

The development of macroeconomic level of a country is affected by many factors,among which the operation of capital market plays a particularly important role.Nowadays,China’s capital market develops rapidly,the financial regulatory department continuously improves the supervision system,and implemented the ST system in 1998,also called the special treatment system.According to the relevant provisions of ST system,China Securities Regulatory Commission shall make special treatment for listed companies with abnormal financial conditions,and predict whether they have delisting risk,and if so,give risk warning.In this system,the elimination of those listed companies in abnormal financial operating conditions can effectively reduce the investment risk,improve the interests of investors,and make the capital market healthy operation.When a listed company is on the verge of ST,the management of the company cannot improve its operating performance quickly in a short time,so they often resort to earnings management behavior to operate the company’s earnings to get out of the predicament.In conclusion,from the perspective of earnings management,this paper conducts a research on the behavior of earnings management in the pharmaceutical industry,which has important theoretical and practical significance.This paper takes Haizheng Pharmaceutical as the case study object,first through the elaboration of the earnings management behavior of Chinese listed companies,lists the main motives and methods of earnings management,and then carries on the indepth analysis of the earnings management behavior of Haizheng Pharmaceutical.Based on the company’s annual report and inquiry letter from 2015 to 2021,it can be concluded that the company mainly adjusts the annual financial data through two accrual earnings management methods: delayed conversion of fixed assets and capitalization of R&D expenditure,and two real earnings management methods: related party transaction and disposal of non-current assets.In order to improve the confidence of creditors,meet the increase of management compensation and maintain the corporate image.Then,based on the accrual and real earnings management behavior of the enterprise as the entry point,it analyzes the obvious pressure,motivation,opportunity and excuse of the management of Hisheng Pharmaceutical for earnings management.Finally,according to the existence of earnings management behavior of Haizheng Pharmaceutical put forward relevant suggestions,in order to help the existence of earnings manipulation and ST listed enterprises to re-examine earnings management,prevent excessive reliance on earnings management to regulate profits,so as to promote the stable and healthy development of China’s capital market.