The Influence Of The Accounting Information Quality Of Listed Companies To The Investors’ Confidence

In March2009, Wen Jiabao, the Former Prime Minister of China, has been clearly said when he met with reporters:"In the face of the financial crisis, confidence is more important than gold and currency." Since the global financial crisis, low quality of accounting information is not helpful to the operation and development of the capital markets, In China, there are also many illegal accounting issues, which had hit the investor confidence. In recent times, China’s stock market was in the doldrums for a long time. Listed company always draw ups deceitful finance report by manipulating the profits, or to appear on market by packing and occupy investor’s bankroll. In fact, the modern economy is credit economy, the development of capital market relies on the majority of investors. Strengthen the supervision on accounting information quality of listed companies, is a powerful way to enhance investor confidence and to protect the interests of the investors. In this context, improving the confidence of investors has become the important premise of the development and prosperity of the capital market in our country.The accounting information is an important factor in capital market, which is able to connect the various roles in capital market. Investors need high quality accounting information of listed companies to make the most valuable investment decisions. If investors can get high quality accounting information, they can make a rational judgment about the future earnings and risk of the. This shows, for all kinds roles of capital market, high quality accounting information is the basis to make the right investment decisionsAt present, the researches about accounting information quality of listed company are mostly from the perspective of listed companies, lack of study from the perspective of investors. This paper focuses on the influence of the accounting information quality of listed companies to the investors’ confidence. It can be used as a branch of the accounting information quality of listed companies economic consequences research. If it can be shown that the high quality accounting information can improve investors’confidence, we can suggest listed companies to improve the quality of accounting information initiatively. At present, the capital market of our country needs a further specification, some of the above research results can provide reference for the formulation of relevant policies. Based on the above ideas, the content is divided into the following five parts:Part Ⅰ:The significance and background of the study. This part illustrates motivation, purpose and structure, and finally elaborates the contributions and inadequacies.Part Ⅱ:Literature review. This part illustrates relevant domestic and foreign literature, then analyzes and compares them.Part Ⅲ:This part use the efficient market theory, the asymmetric information theory and the principal-agent theory as the breakthrough point. Try to find the relevant relationship between the quality of accounting information and the investors’confidence to lay the foundation for the empirical research of this article.Part Ⅳ:Empirical research. This part illustrates descriptive analysis of the collected samples, descriptive analysis, and multiple regression analysis of the quality of accounting information and the investors’ confidence.Part Ⅴ:Conclusions and recommendations. Based on the hypothesis and the empirical results of this study, this part makes some comprehensive conclusions:(1)The degree of earnings manipulation has a significant negative correlation with the investor confidence index. This means that when the degree of earnings manipulation is lower, the investors’ confidence would be stronger.(2) The index of the quality of accounting information disclosure has a significant negative correlation with the investor confidence index which is contrary to the expectation. This fact may relate to that our investors have not thoroughly established the concept of the value investment, most investors follow the trend to scalp.(3) The negative correlation between the degree of earnings manipulation and inv estor confidence is strengthened and the negative correlation between the quality o f accounting information disclosure and investor confidence is weakened when the ultimate controller is non-state-owned.Finally it offers recommendations, and puts forward possible topics of future research. Throughout the study, this paper makes a contribution in the following aspects:(1) Fewer articles research about the relationship between the accounting information quality and investors’confidence. This paper puts the accounting information quality and investors’into a framework for theoretical analysis. Based on the existing theory, the author use empirical methods to explore the influence of the accounting information quality of listed companies to the investors’confidence, then discuss the relationship between the two aspects under the condition of distinguish between the nature of controlling shareholders the discusses.(2) This paper uses two dimensions to measure the quality of accounting information of listed companies, respectively is the quality of accounting information disclosure and the degree of earnings manipulation. This method can be more comprehensive to measure the accounting information quality, and also be able to explore the influence degree of the investors’ confidence.(3) The confidence of the investors for capital market originates from the confidence in listed companies. This is the basis for the rational investment and value investment. On the basis of reference literature, the author mainly from the perspective of listed company level, try to choose some indexes from the perspective of listed companies which can affect investors’ decision about the listed companies to build investor confidence index system, and using the method of the main factors for further measures.Meanwhile, because the writer’s knowledge and ability is limited this research also addresses the following inadequacies:(1) The study of investor confidence belongs to the category of behavioral finance research. Many factors may affect the confidence of investors, such as political factor, economic factor and social factor etc. In addition, because of the empirical research on the confidence of investors just begins in recent years, there is not enough reference about this. In this paper, I choose the proportion of institutional investors holding, annual earnings, the annual net rate, the annual turnover rate as the main influence factors of investor confidence. Maybe some other main factors are not covered and the selection of control variable is omitted and limitations.(2) This paper just use the data of A-share listed companies in Shenzhen instead of all A-share listed companies which is likely to affect its accuracy. The article try to investigate the effect of the quality of accounting information in two dimensions on investors’confidence. One of the dimensions is the evaluation results of the listed corporation information disclosure is just published in Shenzhen Stock Exchange.So I only use the data of A-share listed companies in Shenzhen.(3) This paper just divides the nature of the ultimate controller into non-state-owned and state-owned. The future research can focus on subdivision of the nature of the ultimate controller.