Study On The Relationship Between Earnings Quality And Stock Returns In Small And Medium Enterprise Board

At present, accounting theory circle and practice circle pay close attention toearnings quality together. This paper constructs index system to assess earnings quality from the perspective of financial statement analysis, this construct draws lessons fromdomestic method of assessments of earnings quality, combine the characteristic of the Small and Medium Enterprise(SMES) Board ,At the same time, this study examines whether earnings quality is related with the stock returns.For such a long time, Chinese stock market has been focusingon the profit of the listed companies, while neglecting the earningsquality. As a result, stock returns has nothing to do with earningsquality, the market was taken advantage by bankers, impairing theinterest of investors and market. This thesis, namely empiricalanalysis on the relationship between earnings quality and stock returnsof Chinese on the listed companies, is of great practical significance for revealing the subtle link between earnings quality and stock price,facilitating the management to know the actuality of rational levelof Chinese stock market, understanding whether the investors really concern the earnings quality and introspect the reason, guiding theinvestors to use the financial information reasonably, guiding the reasonable capital flow and resource assignation, suppressing the fake account fundamentally and enhancing the investors'confidence on accounting vocation. At the same time, it is the urgent demand for the consummation of financial analysis system and further development of financial theory.On the morning of June 25th, 2004, The Small and Medium Enterprise (SMES) Board finally startup after waiting for a long time by the market. The establishment of this panel has profound significance in the Chinese stock market history. It symbolizes the start of construction of Chinese multi-level capital market. It provides the middle and small-size domestic enterprises with approaches to raise capital in the stock market, and also provides domestic venture capital with channels to seek investment opportunities in the capital market. Currently middle and small-size companies export approximately 60070 of total exported goods from China, and have become the growth point of domestic economic development.Beginning with the Chinese reality, in the two aspects of development of Chinese middle and small-size stock panel, relationship between earnings quality and stock returns, this paper discusses the necessity of the demonstration analysis on the relationship between earnings quality and stock returns of the stock market. Then, it talks about the study reality on earnings quality and factors affecting stock price, analysing the implication and analysis method of earnings quality, raising the 4 main indictors for earnings quality analysis. Lastly, by using Earnings Response to set up regression models, 4 indicators as independent variable and stock returns as induced variable, I conduct the regression analysis the earnings quality and stock price of 8 periods quarterly report from 2004 to 2006 of 53 the listed companies in middle and small-size stock panel. It shows that the earnings quality of our middle and small-size stock panel embodies information content but it's not stable. Middle and small-size stock panel investors are lacking of sense. There is "functions are locked "on the market .The phenomenon that and the earnings quality of general regression is higher than the quarterly's shows the probability of earnings manipulation in_our listed companies middle and small-size stock_panel. It hinders the protection of investors'interest, reasonable flow of capital, resources assignment, further development of financial theory. Therefore, the author makes some constructive proposals.