Empirical Research On Motivations Of Voluntary Correcting Prior Period Errors Of Listed Company

The existing accounting standards and the accounting codes have not made the compulsory stipulation that when to correct the prior period errors. So it is always considered that when the prior period errors are found out. Therefore, listed companies often do not correct the prior period errors until the supervisory departments find out the errors, or correct them when they need. This behavior of the listed companies has violated the authenticity and objectivity request of financial report, which causes that the financial reporting users obtain distortive messages and misleads them. If this situation does not stop promptly, it will seriously disturb the order of capital market. Of course, it's necessary that we study the motivations of voluntary correction by empirical study.Based on the present study about prior period errors at home and abroad, this thesis has outlined the basic classification of the prior period errors correction and the theory foundation. It has carried on the statistical description of listed companies'prior period errors correction, and discovered that the phenomenon of listed company non-voluntarily correct prior period errors is common. It concluded that it is essential to study how to stimulate the listed company voluntarily correct the prior period errors. The listed companies which disclose the prior period errors corrections during the period from 2003 to 2007 were selected as research sample, and then divided into the voluntary correction and non-voluntary correction two groups. Then the motivations which stimulate the listed companies voluntarily correct errors was testified by methods of mean value test and multivariate linear regression. The major empirical results are summarized below: The direction of errors correction and absolute control correlated positively with it. The effect degree of errors correction and the asset-liabilities ratio correlated negatively with it. The relative control and the income quality didn't correlate with it. Based on the statistical description and the empirical research, the paper puts forward the following four proposals: Perfect the enterprise accounting standard and related accounting system; strengthen the construction of the enterprise internal control and the control system; improve accountants' professional quality and the moral cultivation; increases the exterior supervision dynamics of the listed companies.This article's value lies in the object of study was A-Share Companies which have the prior period errors correction, including simultaneously publish stock B or stock H, during the period from 2003 to 2007. And they were divided into two groups the voluntary correction and the non-voluntary correction to study the motivations of voluntary correction. In the research supposition, this paper proposed that the direction of errors correction, the effect degree of errors correction, the absolutely control and the relative control.