The Study On The Motivation Of Financial Restatements Of Listed Companies In China

In recent years, the increasingly serious financial restatements phenomenon in the capitalmarket of our country, makes a huge loss of wealth to the listed companies and investors, andis widely concerned by authorities and academia. Through reviewing the existing literaturesabout the financial restatements, we can find out that the focus spot of current research on thistopic is mainly concentrated on the relationship between the characteristics of companies offinancial restatements as well as the results by the financial restatements. This article attemptsto take the listed companies of financial restatements as the object of study, and to discuss thefrequent motivation of financial restatements in listed companies of our country.This paper reviews the previous studies on the concept of financial restatements,characteristics of firms of financial restatements and the motivation of financial restatements,describes the institutional background of financial restatements of our country, and analyzesthe status of the financial restatement of our country, and summarizes the main problems.They are that financial restatement system is not perfect, and that the punishment for thesupervision department is too small for illegal information. This article selects listingcorporations of financial restatements occurring in A market of the Shanghai and Shenzhenduring2008-2011as research sample, and summarizes the possible causes of financialrestatements: the high salary of executives, profit, financing, turning loss, debt covenants andbookkeeping cost, and puts forward to the corresponding research hypothesis, and establishesLogistic regression model, and does the university test and multivariate regression analysis.The study finds: listing corporation’s loss, rate of assets and liabilities, financial personnelentry cost and financial restatements are positive correlation, and equity incentives, the rate ofearning growth, refinancing, firm size and financial restatement are not related. The empiricalresult shows that: the listing corporation’s loss, the high rate of assets and liabilities and largevolume of business accounting are the main reason for financial restatements of listingcorporations. According to the result of the study, it puts forward to three aspects: listingcorporations to strengthen the corporate governance, registered accountants to improve auditquality, regulators to perfect financial restatements system, to norm the behavior of financialrestatements of the listing corporations in our country. This paper has two innovations. The firstly, the topic selected is relatively new. There aremany motivation theory and empirical study on financial restatements abroad. However, theresearch for scholars in our country is mainly about the company characteristics and marketreaction in the relative field of financial restatements and the motivation research is mainlythe specification analysis based on theoretical basis, less empirical research. The secondly, thebookkeeping cost as the cause of financial restatements are analyzed, and it is rare in previousstudies of financial restatements.