External Research Regulation Of Information Disclosure Of Listed Companies

The small and medium enterprises that lists in the New York, USA appeard a series of accounting scandals. While investors suffers huge losses, the effectiveness of the information disclosure regulation again is questioned by the social from all walks of life. Judging from the current situation of information disclosure supervision system in our country, there are hundreds and thousands of violations of companies in every year, but only more than a dozen violations of companies are punished by regulators from Putting on record to lawsuit. This kind of phenomenon instructs that the information disclosure supervision system is more and more perfect,but the information disclosure supervision system is unable to adapt the needs of the rapid growth of securities market. The information disclosure regulation who wants to protect the interests of the investors and improve the quality level of information disclosure. If the punishment to the violation of companies from the regulators can bring externality which can influence the behavior of investors and managers. It is meaningful to researches the information disclosure regulation from the perspective of externality. This article from the perspective of the externality of information disclosure regulation, Using the punishment announcements of the disclosure irregularities between2007and2011for a sample of Chinese public companies,this study examines the effectiveness of disclosure regulation from the point of externalities. If the punishment to the violation of companies from the regulators can bring externality which can influence the behavior of investors and managers. It is meaningful to researches the information disclosure regulation from the perspective of externality. This article from the perspective of the externality of information disclosure regulation, Using the punishment announcements of the disclosure irregularities between2007and2011for a sanmple of Chinese public companies,this study examines the effectiveness of disclosure regulation from the point of externalities.At first I review the relevant literature and define the information disclosure system and external. The second according to the supervision structure which is putted forward by American financial economics, Yale university, professor Chen zhiwu. This article analysises the external of the information disclosure regulation from the board of directors and market participants.The market participants who require high accounting information quality are investors. The board of directors is very important to the company.So this article that based on the invedtors and management disclosure theory and put forward relevant assumptions and empirical study. The empirical results show that the punishment not only bringing the negative market reaction to be punished companies, but also brought negative market reaction to other companies.That says that punishment announcement can change investors expectations and evaluate the value of the company again and improve the investor risk awareness, ultimately protect the interests of investors. Secondly, basing on the empirical study also found that accounting information quality which plays a vital role in information disclosure regulation of has positive correlation with market reaction. That is the accounting information quality is bad, the market reaction is poorer, that is to say, the company which has the accounting information quality, the more likely be punished by the negative impact of the announcement. Thirdly, in the externality of information disclosure regulation, Managers will learn from the market. Managers continues to focus on the stock prices of being punished companies. According to their own company market reaction to learn and reflect their problems in information disclosure. The empirical results show that the managers who in order to avoid the risk from the investigation and be doubt information quality by investors are constantly improving their own quality of information disclosure, improve their behavior of information disclosure. These results not only enrich the theories of externality of information disclosure regulation in our country, and provides the evidencethat the necessity of information disclosure regulation exist. This revelates us that the existence of the information disclosure regulation is necessary,in the underdeveloped capital market in our country, in spite of all kinds of accounting scandals appearing. punishment can prompte investors to re-evaluate the value of the company, can improve the investor’s risk awareness and protect the interests of investors. Managers studies in the market, punishment announcement can let the managers improve the quality of information disclosure, improve the information disclosure behavior. The significance of these results and the revelation to us is:under the condition of China’s regulatory costs limited, although regulators can’t investigate each of the companies that violate the rules, but the externality of information disclosure regulation can significantly affect the disclosure of information behavior, this provides strong evidence to the validity of the information disclosure regulation.