The Analysis On Market Conductibility Of List Company's Profit Control Through Related Party Transactions

This paper begins with the analysis of basic problems of related party transactions. Then the paper draws forth that great risk exists in the list company's profit control through related party transactions. Through empirical analysis of market conductibility of related party transactions, this paper draw the conclusion that investors can distinguish two kinds of related party transactions . At the same time, the reaction of investors also illustrates that on our country' stock market, the profit control flows over. This fact lead to the result that invests lose the confidence on the stock market., and the actions of speculation over flow. At last our country's stock market will lose it's function of distributing resources.This paper is divided into four parts.In the first part, we elaborate the basic theoretical problem of related party transaction. Correctly defined related parted and related party transactions is the basic thing that we do when we begin our study. So first , this paper elaborate the definition of related party transactions . Then the paper elaborate the source and nature of related party transactions. At last, the paper draw the conclusion that there are great risks in profit control through related party transactions.In the second part, the paper analyses the profit control through related party transaction . We analyse the process , subjective reasons , objective conditions and the harm of profit control through related party transactions. The third part analyses the market conductibility of profit control through related party transaction. The content is based on the market model. And the paper analyses the reaction of the market in 2001.Then we divide the study samples into two kinds of study samples on the condition of the collected fund of the list company. Through observing and comparing the CAAR of two kinds of samples between (-10,20), we analyses the market's reaction . At last this paper draw the conclusion that investors can distinguish the two kinds of related party transaction. This indicates that hearsay flow over the stock market. So we must standardize the related rules .The last part of this paper give some advices to standardize the related party transactions.