In April 2020, Luckin Coffee, Chinas rival to Starbucks, announced an investigation into issues raised during the audit of the consolidated financial statements for the fiscal year ended December 31^st, 2019. The investigation relates to allegations of accounting improprieties and fabricated transactions and led to their delisting from NASDAQ on July 13, 2020. See the following article related to the matter at https://www.accountancydaily.co/accounting-scandal-brews-luckin-coffee

Based on your reading of the article and other academic reading, write an essay discussing the following:

• The various incentives and mechanisms of earnings management in firms. Your discussion should provide a comprehensive definition of earnings management. You should also discuss the association between accounting earnings and market returns (known as the earnings-return relationship) and how earnings management behaviour might affect this association. Furthermore, you should discuss the role of corporate governance in this context.
• In terms of the alleged manipulation in Luckin, discuss what happened in the context of the reporting and possible reasons for the manipulation. In your discussion, refer to governance factors within the firm as well as regulatory effects that may be specific to China.
• What is the effect of earnings management on the capital market in general and in the case of Luckin? With respect to the Luckin case, provide graphical evidence showing how the market reacted to the announcement of the manipulation in the 3 day window around the announcement (-1, 0, 1).

It should not exceed 1,500 words (excluding references and graphical presentations)