Analysis and Suggestions on the Applicability of ST System Under the Impact of Earnings Management Behavior

Abstract

In order to adapt to the development and management of China's stock market, Shanghai and Shenzhen Stock Exchange put forward the delisting system with Chinese characteristics in 1998—ST system. However, with the introduction and application of earnings management in China, many * ST listed companies choose to use earnings management to temporarily inflate profits when facing delisting pressure, so as to avoid delisting, which has a certain impact on the actual operation of ST system. Through data screening and analysis, this paper analyzes the data of ten listed companies that successfully lifted the delisting early warning crisis in 2016 to verify the practical applicability of China's ST system under the impact of earnings management behavior and put forward relevant suggestions.