Financial Reporting Transparency And Investor's Protection

This paper selected the financial reporting transparency of Chinese listed companies as the study's title, combined real backgrounds of Chinese listed companies, based on the visual of investors'protection. Firstly, this paper define the concept of the financial reporting transparency, then, set up the evaluation index system of the financial reporting transparency on the basis of analyzing the course of information convey, and then study the function mechanism that how the financial reporting transparency can protects investors'interests. This paper have probed into the financial reporting transparency's influences on the investor's interests protections from three angles as follows:earnings management, accounting information value relevance and enterprise's value separately, including the influence route and influence degree; Finally, according to results of the studies as described above, in order to improving the intensity of investors protection through the financial reporting transparency, this paper put forward corresponding policy suggestions.This paper considers the financial reporting transparency as a dynamic concept, and emphasized that the financial reporting transparency does not be confined to some static characteristics of the financial reporting quality what the financial report should be, it should conclude the external information user how to receives, understands the financial information revealed by company, that is to say, the financial reporting transparency should be the degree of true, intact picture intensity to the company's external information users. This concept put emphasis on that, appraising the financial report should in terms of investor, it should help the external information users understand the companies' overall situations such as the company's present financial situation, management performance and operation risks;This paper divided the financial reporting transparency into 5 aspects such as:governance environments, content structure, outside supervisor, timeliness and convey efficiency of the financial report, and then constructs the corresponding evaluation index system, examined this appraisal system's validity and reliability; Respecting to the relation between earnings management and the financial reporting transparency, this paper find that, improving the financial reporting transparency can notably inhibit earnings management of listed companies, but for different directions'earnings management, its influence is different, at same time, earnings management would influence the financial reporting transparency each other, but the influence is obviously different to different types of earnings management; Respecting to accounting information value relevance, the result of study shows that, the financial reporting transparency can really strengthen the value relevance of accounting information, but this kind of increment effect mainly reflects on the impact on relevance of earnings value per share(EPS), the impact on net assets per share is not obvious; On the impact on enterprise's value, the studying conclusion indicates that, there is no a strict linear relation between the financial reporting transparency and company's value, but roughly demonstrate the characteristic of a smoothly U curve, that is to say, the financial reporting transparency's promotion on company's value may exist only when the financial reporting transparency being more high-level; Based on the above-mentioned results, this paper considers that strengthening the financial reporting transparency is an effective way to protect the investors' interests, and proposed some policy suggestions at this point.