A Study On The Impact Of Financial Restatement On The Cost Of Equity Capital Of Listed Companies

Financial reports of listed companies is their main form of disclosure of information, but also an important way to get the public company information. However, in recent years, China’s listed companies’financial restatements phenomenon intensified, across the board, and the number of restated companies is always high. Moreover, the nature of the reasons for the restatement is serious, covering a wide range restatement. We can say that the listed company’s financial restatements increasingly and frequently constitutes a serious challenge to the healthy operation of the capital markets. What is the motive of listed companies’ financial restatements? What impacts Financial restatement of listed companies have? What is the impact of Financial restatement on the cost of equity capital of the company?This article adopts the method of combining normative analysis and empirical research on the system research, finally hope through the research in the field of financial restatement, cause enough attention of related party and prompted them to take more effective measures. Listed companies can dispel the intentions of profit manipulation by the means of financial restatement, making efforts to improve the quality of the company’s information disclosure. Investors can give financial restatements announcement more attention, delivering a powerful insight into financial restatement behavior information, they can make better investment decisions. For regulators, they can effectively formulate relevant regulations to strengthen the standardization of the financial restatement behavior, so that the whole capital market more orderly development of our country.The author summarizes the findings combing and financial restatement factors at home and abroad, to explore the starting point of this article. Based on the main factors to select variables, set sample and filter data to 2011-2013 published interim financial restatement announcements Shenzhen A-share companies for the study, which will be listed on the Stock Exchange and with the same industry, similar size listed companies to conduct empirical research pairing. By descriptive statistical analysis, and the use of the mean test, Pearson correlation test and regression analysis, testing and correlation of the independent variables and the degree of influence the cost of equity capital.In this paper, finally through the study concluded that the financial restatements cause rising equity capital cost of listed companies; Different content and the nature of the restatement of the influence of equity capital cost of listed companies is not the same. Finally, on the basis of the full text research obtains several revelations, the financial restatement of the current our country stock market there are many non-standard place, to fundamentally improve and standardize the financial restatement behavior requires the joint efforts of company’s internal management and external supervision. This paper argues that to strengthen the external supervision, improve the company’s internal control from the source control financial restatements; Appropriate concentration of ownership structure is beneficial to develop supervisory function shareholders, reducing the risk of financial restatement; And set up the audit committee and chairman of the board of directors and general manager to avoid double as one, to strengthen internal control effectiveness, enhance the financial information quality, reduce the possibility of financial restatements.