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Academic Journal of Business & Management, 2023, 5(19); doi: 10.25236/AJBM.2023.051901.

Research on Earnings Management Behavior Identification and Motivation of Goodwill Impairment—Taking Century Huatong as an Example


Chen Xueni, Mao Guoyu

Corresponding Author:
Chen Xueni

School of Management, Sichuan University of Science & Engineering, Zigong, China


The formation of huge goodwill provides a good "cover" for enterprise management to carry out earnings management. Listed companies can create a huge amount of goodwill with the help of high premium mergers and acquisitions, and in order to achieve the goal of positive earnings management, they may intentionally choose to delay the provision of goodwill impairment. On the other hand, goodwill impairment may also become a means for management to carry out negative earnings management, especially in the case of poor short-term business performance and decline in performance, but the overall sustainable profitability has not been changed. Therefore, it is necessary to adopt appropriate methods and models to determine whether an enterprise has earnings management behavior under different circumstances [1]. Based on this, through the in-depth analysis of the relevant financial data of Century Huatong Company, the accrual profit separation method is used to identify the degree of earnings management, and the obvious earnings management motivation is revealed in the formation of goodwill and the timing of goodwill accrual. At the same time, it is found that the provision of goodwill impairment is also affected by earnings management motivation. These earnings management behaviors may cover up the real business situation of the enterprise, which has an adverse impact on investors who do not know the inside information[2].


Earnings management, goodwill impairment, Century Huatong

Cite This Paper

Chen Xueni, Mao Guoyu. Research on Earnings Management Behavior Identification and Motivation of Goodwill Impairment—Taking Century Huatong as an Example. Academic Journal of Business & Management (2023) Vol. 5, Issue 19: 1-7. https://doi.org/10.25236/AJBM.2023.051901.


[1] Liu Dan, Xu Wendong. Analysis of goodwill impairment in M&A based on earnings management [J]. Journal of Business Accounting, 2022, (18):25-29. 

[2] Zhou Keming. Goodwill Impairment, Earnings Management and audit Input: Empirical data from A-share listed companies [J]. Journal of Jingchu University of Technology, 2021, 36(06):17-26. 

[3] Bao Xiufen, Xie Yuan. Large-scale impairment of corporate goodwill: Economic downturn or financial "big bath" [J]. Finance and Accounting Bulletin, 2021, (14):72-75.