Research On Quality Of Financial Reporting Safeguards Based On Investor Protection

Our 12th Five-Year Plan Clear that the capital market in the future economic structure and industrial structure, the basic role of transformation. Investor is the core subject of capital market. Full protection of the interests of investors is the cornerstone of healthy development of the modern capital markets.In China, the more complex internal and external capital market environments and the accelerating development of multi-level capital market during the 12th Five-Year Plan press for the enhancement of investor protection. It has practical significance to study how to protect investor's rights and interests.After the financial crisis, the international capital market environment changed dramatically, triggering the re-think on the objectives of financial report among the international community. The government or supervising organizations are giving greater emphasis on the protection function of high quality financial report for the investors. Meanwhile, the basic concern of outside investors has been gradually shift from the attention to the financial statements with value of information towards the protection of their own interests. In December 2008, United States Securities and Exchange Commission made clear in the report submitted to Congress---"financial report's main objective is to meet the information needs of investors." Also in China, recently more indigenous scholars began to pay close attention to the study of accounting and investor protection. In 2011, the concept of "listed company investor protection index" was published for the first time by the National Social Science Fund project "accounting and investor protection". From domestic and foreign researches on accounting and investor protection, the study in this area will definitely be with the great importance to the capital markets as well as the development of natioanl economy.In some existing research achievements, the relationship between financial reporting and the protection of investors has been demonstrated theoretically and empirically, either on the investor protection from the perspective of company governance, or on the quantification of accounting and investor protection index with data, yet no research covers how to achieve the investor protection objectives by improving the quality of financial reporting, and how could we find the route to achieve sound development between the two aspects. This article intends to be a breakthrough in these matters, with bringing in theoretical innovation and practical application for the development of accounting and investor protection. On the one hand, it tries to deepen the research on investor protection from the view of accounting. And on the other hand, it helps to further the public awareness on relevant accounting issues under the fiamework of investor protection and provides accounting support to the development of capital markets in the new era.Based on the reality of capital market environment, this article probes into the guarantee of financial report quality from the perspective of investors protection, giving more concern to the overall quality protection of the financial report. It seeks after building up the investor rights protection mechanism to meet the need of capital market development from the perspective of qualified financial reporting. It analyzes the reasons of the existing outstanding problems in current financial reports of Chinese listed companies in terms of investor protection and puts forward corresponding policy recommendations.The main research contents coverage:firstly, it illustrates the necessity and practical significance in setting up quality assurance system of financial reports to meet the target of investor protection, in accordance with the features of future development of China's capital market environment. Secondly, it analyzes the features of finicial reports quality in the view of investor protection, under which it focuses in the authenticity and transparency of reports. Thirdly, it explores the route to realize the availability of quality guarantee of financial reports in terms of investor protection. The realization of justice and efficiency is the main route and the core based in which all other elements could unite together, support each other and develop in a healthy way as a whole system. Finally, it studies the elements to guarantee the financial report quality, with a coverage of all elements from information generating to feedback, including the instituation and interaction among the set up and carry out of accounting standards, as well as the financial reports disclosure, etc. And it seeks for the injustice and inefficiency points in each elements of the financial reports quality guarantee, giving corresponding policy recommendations.Innovative highlights of the article:from the researching point, it brings forward the concept that investor protection is the prime concern of financial report with a development view in accordance with future development features of China's capital market environment. It also puts forward the quality features of financial report that based on investor protection, and initiates the route to guarantee financial reports quality via the realization of justice and efficiency to investors. From the content of article, it expands the existing research theories on financial reports. Some long-time existing problems and relevant policy recommendations have been advanced to facilitate the operating circumstance in financial reports with some examples study under China's market surroundings. The limitation of accounting standards operation circumstance has been analyzed and corresponding policy suggestions have been made. On the point of time-effectiveness of financial reports, the current situations in China and relevant causations have been illustrated and some recommendations have been suggested. In research methods, with some latest cases, this paper analyzes the current limitations in investors protection in indigenous financial reports, and on the basis of document and theoretical analysis, it initiates some recommendations for improvement.With the continued deepening of ownership reform in China, some new changes and challenges will be introduced and encountered in China's capital market. It will be a new and accurate direction to study how to guarantee the quality of financial reports with the aim of investor protection, and probe into the financial report standard in accordance with the development of capital market. Thus it could provide valuble theoretical supports and policy recommendations in accounting during the 12th Five-Year Plan, in which the capital market will be a primary basis for the successful transformation in economical and industrial structures.