Research Of Financial Restatement Drivers And Consequences Based On The Perspective Of Financing

Accounting information is an important basis for the capital market investors to invest decision-making, and high quality of accounting information not only is the guarantee of the modern capital market operation healthy and security, but also is the security of the interests of investors.As an important way of disclosure information, the financial report of listed companies is an important way for investors to understand an enterprise’s financial position and operating results. In recent years, there are more and more financial restatements, in a way of supplement or amendment, emerged in Chinese security market. The restatement of financial report showed the low quality and incredibility of former financial report, and caused serious economic result such as enterprise market value loss, cost of capital increase and the industry reputation negative decline. Although there has already set up financial restatements system in China, there are still large gaps when compared with Western countries; and China’s capital market is being in transition and development stage. This paper puts forward some of the following questions:What is driving Chinese listed companies restate their financial report? Will Chinese investors use the financial restatement information when they make decisions? Will financial restatement announcement impact enterprises’ financing?These answers can lead us to deeper understanding of causes and results of financial restatement,But nowadays domestic and international relevant research are seldom, so this paper research this themes under the background of China system.This paper is made on the basis of generalizing relevant literature, analysis of development of system background and the current situation. The reseach work takes the2008-2010financial restatements reports of a share companies listed in Shanghai and Shenzhen Securities Exchange as study samples. And Give her matching samples.The first part of the empirical research is about the relationship of financing demand and financial restatements.Selecting dividend payments ratio, dividend payment rate change, business activities net cash flow, generated productive financing demand and external financing demand, refinancing as proxy variable of enterprise financing needs.All data were analyzed by paired-sample T test. There’s a marked difference between two groups variables in addition to the productive financing needs. Financial restatements as the explained variable and other variables as the explanatory variable, we set up the Logistic regression model and test three year’s data of samples. The authors found that dividend payment rate, dividend payments rate reduced, business activities net cash flow and financial restatement generated significant negative correlation. And External financing demand, refinancing meaning and financial restatement are significant positive correlation. So come to the conclusion that the more financing is needed, the more probability of financial restatement.The second part of the empirical research is based on the financing change perspective to research the financial restatement brings to the enterprise’s economic consequences. In the period of before and after the restatement report announced, borrowing cash inflow amount of the financial restatement enterprise is selected, and the matching enterprise select the same period and the same data, Paired analysis was used to compare between groups.Founds contain that before restatement report announced, restatement enterprise and matching enterprise borrowing cash inflow amount have not significant difference. And after restatement report announcement, they have significant difference.The pairing comparison showed that the financial restatement will give enterprise debt financing effects.Secondly this paper has conducted the linear regression. The results show that the financial restatements have negative correlation with borrowing cash inflow amount.Further research use the sample of restatement enterprise, the relationship between The restatement delay, relative income adjustment, absolute income and borrowing cash inflow amount。Come to the conclusion that restatement relative adjustment and borrowing cash inflow amount are significantly negative related.The conclusion shows that the financial restatement will lead to the creditor to adjust enterprise credit, enterprise debt decline significantly.The research results based on the empirical study are discussed. The paper point out that some of listed companies based on the specific purpose to financial fraud, Lead to later release financial restatement announcement. And some of the enterprises based on the objective reasons correct their financial report. Therefore, it is necessary to further distinguish between financial restatement enterprises。For countries, in view of the different types of financial restatement enterprise work out different supervision system, Investors, in view of the different types of financial restatement enterprise make different response.Finally this paper also puts forward the insufficiency and the follow-up research direction, For instance distinguish malicious financial restatement and general financial restatement. Research the relationship between the scale of debt financing, debt financing source structure, debt financing term structure and the financial restatement for.