Study On Influencial Factors Of Financial Restatements Of Listed Companies

Financial report is the main carrier that listed companies disclose information to the public, and the important way that the investors get the information of the companies. However, in recent years, the phenomenon of financial restatements is growing in our country. The companies involve in various industries, the number of the companies is large, and the reasons of restatements are serious. And the restatements cover a wide range. It can be said that the frequent financial restatements of listed companies constitute a serious challenge to the capital market. Well, why do listed companies restate their financial reports? What are the key factors that affect financial restatements? And what’s the impact of these factors on the different types of financial restatements? In this paper, we use the method of combining normative and empirical analysis, and select Shanghai and Shenzhen A-share listed companies which have released financial restatements during from2010to2012as the sample for research, in order to provide empirical evidence to investors for decision-making and regulators for formulating relevant laws and regulations.There are five parts in this study. The first part is an introduction, which mainly focuses on the background and the significance of this study, literature review, research ideas and research methods. The second part is the basic theory of the influencial factors of financial restatements. In this part, the concepts of relevant research subjects are classified and then sort out the theory. The third part is about the current situation of financial restatements and the analysis for the influencial factors of financial restatements. By introducing the system background of financial restatements, we describe listed companies which have published financial restatements, and then we summarize the impact factors of financial restatements. The fourth part of this study centers on the empirical research on the influencial factors of financial restatements. We choose Shanghai and Shenzhen A-share listed companies which have published financial restatements during2010-2012as the sample. Then we make an empirical study and analyze on the factors that influence financial restatements through descriptive statistics and single variables test and binary logistic regression. The last part of the research is about the findings, deficiency and prospect.Through this study, we find that:the external factors have a significant impact on the probability of financial restatements of listed companies. The companies listed on the Shenzhen Stock Exchange are more likely to restate financial reports. And the scale of accounting firm has significantly negative impact on financial restatements. As the intemal factors, we find the significant positive relation between the equity balance, the level of debt and the likelihood of financial restatements. And the ST companies also have a great possibility to have financial restatements. However, the proportion of stock of the institutional investors has significantly negative impact on financial restatements. Furthermore, we also find the ST companies, the companies which listed on the Shenzhen Stock Exchange and the companies whose institutional investors hold low proportion of stock are more likely to release correction bulletins.