Research On Contingent Liabilities Information Disclosure Quality Of Listed Companies

Contingent liabilities are current or potential obligations of the Company as a result of uncertainty.As a potential factor,which not only affect the company's continuing operations and lead to huge investment risk to investors and creditors.Contingent liabilities Information Disclosure play an important role in the following areas:(1)It can reduce investor decision-making mistakes and to increase security claims of creditors,thus contributing to the protection of investors and creditors;(2)From the internal management perspective,it enables managers to accurately understand their actual financial situation to reduce loss risk of cash,so that business managers do not overestimate the business performance thereby improving financial quality;(3)Contingent liabilities due to the uncertainty is an important source of business risk.As a potential factor that could make enterprises suffered heavy debt and increase financial risk,or may also lead to the loss of corporate assets.and increase business risk.Contingent liabilities information disclosure allows managers to accurately reflect the level of Contingent liabilities and effectively prevent and control risks;(4)Contingent liabilities information disclosure can improve accounting transparency to help capital market development.However,in practice,because it is not enough attention to information disclosure of contingent liabilities,so many investors suffered huge losses due to'business matters or conceal information or untimely disclosure.According to analysis of the Ministry of Finance with the accounting standards implementation survey results,there are still many problems on contingent liabilities information disclosure.In theory,contingent liabilities information disclosure has made some research,but it is relatively weak compared to other studies in the field of accounting.The research focused on domestic listed companies with the accounting standards implementation,which ignores information content of contingent liabilities information disclosure,motivation,factors of and economic consequences of the disclosure.In the method,it uses mostly normative research rather than empirical research.In the sample,it uses mostly some provinces listed company sample,so the sample size is too small.Due to different levels of economic development in different regions and different number of listed companies,these studies do not accurately summarize the overall situation of China's listed companies contingent liabilities information disclosure.Taking 2010-2013 Shanghai Stock Exchange listed companies as samples,the article uses empirical methods to study the quality of Contingent liabilities information disclosure and other related issues.First on the basis of the previous studies and statistical information on current situation of contingent liabilities information disclosed,the article summarizes the major quality problems about contingent liabilities information disclosure,including concealing disclosure?not timely disclosure?not adequate disclosure,not standardized disclosure and low information content.The reasons through preliminary analysis include the following aspects:(1)lack of adequate knowledge of contingent liabilities;(2)imperfect contingent liabilities information disclosure system;(3)lack of motivation for the voluntary disclosure;(3)lack of strong regulation for the mandatory disclosure;(5)lack of evaluation for disclosure quality.Articles constructed quality evaluation system of contingent liabilities information disclosure utilizing entropy model approach,and then analyze the listed company contingent liabilities information disclosure quality situation using the above model.It's found that relevance is far higher than reliability for the proportion of entropy of quality characteristic index of contingent liabilities,that in general information disclosure quality of listed companies is low,but there is a big difference between the different companies,different industries and different regions.Using of empirical analysis method to analyze the factors and economic consequences of contingent liabilities information disclosure quality,It's found that:(1)Corporate governance,financial characteristics,the audit agency and so will affect the listed company's information disclosure quality of contingent liabilities,but there are differences in the industry.Overall,ownership concentration,company size,debt leverage has a significant positive impact on the information disclosure quality of contingent liabilities,while the proportion of managerial ownership,profitability almost does not affect the information disclosure quality of contingent liabilities.(2)Contingent liabilities information disclosure quality has little effect on the companys cost of capital.But In general it has a significant role in promoting the company value and reducing the level of risk.The article concludes with some policy proposals for improving the listed company contingent liabilities information disclosure quality,mainly from the theoretical research,system construction,mechanisms,optimization,human factors and other aspects.Currently research is very rich on information disclosure,but mainly concentrated in the overall information disclosure of company,less specific information disclosure of company.There have been some studies on voluntary information,internal information,segment information,etc.,less involved contingent liabilities information disclosure.At present,many studies on contingent liabilities information disclosure more from the perspective of government or financial institutions but less from the perspective of business.Therefore,this study can enrich the contents and the perspective of information disc losure.In addition,this issue,how to quantify the quality of contingent liabilities information disclosure,restricted to carry out the relevant empirical research.Articles constructed quality evaluation index system on contingent liabilities information disclosure taking the entropy model,which provides a better technology platform for conducting empirical research on contingent liabilities information disclosure.