Research On Information Of Financial Restatements Of Listed Coompanies' Annual Statements

The financial statements as a listed company disclosed the company's financial position, operating results and cash flow information carriers; it is an important means for investors to obtain company information. Since the efficient market hypothesis has been proposed, efficient and reliable accounting information quality has been regarded as the key to ensuring the healthy development of securities market, only to ensure a true, complete and timely information disclosure, it may form an effective securities market. But in recent years the behavior of annual report on the restatement appears frequently, and there is tendency of escalation. This has led to widespread concern about foreign scholars; they are from a different point of view to study the impact after restatement announcement, and whether the market has ability to identify this behavior effectively. With foreign capital markets mature in comparison, China's stock market got a late start, the economic environment and institutional context are also quite different, so it is very necessary to research whether securities market can respond to the new information released by the financial restatement announcement.Drawing on a large number of relevant domestic and theoretical research and empirical research, this paper based on 88 in Shanghai and Shenzhen A-share listed companies as samples to study during 2006-2008 period, which announce to amend and disclose the previous annual financial reports.For the basic characteristics of the restatement of financial statements in the Chinese capital market, using a statistical description, using event study method to empirical analysis tests the share price within a short time window changes before and after the restatement announcement, the final using regression analysis to discuss whether the restatement announcement with the Information Content has the power to explain the shares'fluctuation.The results showed that before and after restatement announcement within a time window the stock prices as a whole will be a significant negative impact, indicating that the market can capture the new information released by restatement announcement and thus respond accordingly. Investors also will make a distinction between the contents of the restatement announcement contains. Investors will be more sensitive to the negative reaction related to the core indicators, reduced earnings, suggests that investors pay attention to repeated notice, or the substantive content of the adjustment, while related to the longer length of restatement the market the will response greater negative. In the control variables, the regression results show that company size and the cumulative excess return was significantly positive correlation, that is, the greater the company size, the greater the cumulative excess return. This shows that the larger the company, the stronger capacity to integrate public information and have better performance in the market.