Financing Needs Of The Restatement Of Financial Equity Incentive Motivation

In recent years, the more and more serious phenomenon of financial restatements in domestic and international capital markets reduces the quality of accounting information, strikes the confidence to financial statements system of investors who suffer huge economic losses at the same time, disturbs the normal movement order of the securities market. Whether as a means or a consequence of earnings management, financial statements reveal the behavior of earnings management of listed companies to a great extent as an event occurred afterwards and actually. So the motivation hidden behind the financial restatements deserves to consider and discuss deeply.The article mainly studies the behavior of financial restatements under the motivation of financing demand and equity incentive from the aspect of the pressure of capital market and manager compensation contract. To better study the research theme of this article, it chooses listed companies of China A-share market from 2005 to 2007 who implement equity incentive and whose paired samples as the object of study, and adopts logistic forced-into regression and gradually filtering regression to examine the relationship of financing demand, whether implement equity incentive or not, different equity incentive pattern and financial restatements, riches the literatures on financial restatements motivation of Chinese securities market, and provides a meaningful reference for perfecting the governance mechanism and accounting information supervision and management mechanism of listed companies. The major study conclusions are as follows:Firstly, the relationship of equity incentive and financial restatements. The implement of equity incentive plan increases the possibility of financial restatements; the degree of equity incentive and financial restatements are highly positively, namely the larger amount of incentive equity awarded to operators, the larger possibility to occur financial restatements; the companies'possibility to occur financial restatements who implement the equity incentive pattern based on stare prices is significantly larger than who implement the equity incentive pattern based on performance. The research conclusion supports to implement equity incentive, and especially the opinion that the operators of listed companies who implement the equity incentive pattern based on stare prices have short-term earnings manipulation behaviors under the motivation of manager compensation contract.Secondly, the relationship of financing demand and financial restatements. The listed companies'financing demand significantly increases the possibility of financial restatements, namely the listed companies who have stronger financing demand have more possibility of financial restatements, and it illustrates that when the companies'operating performance is poor, the operators driven by financing demand have the motivation of earnings manipulation, which leads to occur financial restatements. The research conclusion supports the opinion that under the pressure of capital market, listed companies have earnings manipulation behaviors under the motivation of financing demand.Thirdly, the relationship of control variables and financial restatements. Compared to the companies not occurred financial restatements, the companies occurred financial restatements have the characters such as higher market risk, lower growing capacity, weaker profitability, poorer liquidity and more concentrated equity.