The Research About The Impact Of Government Audit On The Quality Of Accounting Information Of Listed State-owned Enterprises

Accounting information is not only a kind of information system that can transform internal information reliable into external information through financial report, but also an important source of information for investors to understand the company’s operating conditions and operating standards. With the development of company system, more and more companies adopt the separation of ownership and management business model which not only bring many benefits to the companies but also produces moral hazards and adverse selection problems caused by asymmetric information. Authentic accounting information can effectively alleviate the asymmetry information and agency problems caused by asymmetry information, so as to improve the company’s operating efficiency. Therefore, reliable and relevant accounting information for either external or internal stakeholders is extremely important. Since2005, government audit institutions began to audit the state-owned group listing corporations’fiscal revenue and expenditure and make public announcement of audit results. Issues found in the government audit announcement include accounting and financial management, staff salary, project investment management, economic decision-making losses, internal management and problems left over from previous years. The audited listed state-owned enterprises have disciplined violations on assets, liabilities, gains and losses in different degrees; especially in the presence of much planning the profits and liabilities, less accruing assets. Therefore, the audited listed state-owned enterprises have different degrees of distortion in accounting profit and the internal management of accounting information. According to the provision of "Auditing Standards ", government audit institutions have statutory functions implementing treatment and punishment. Therefore, government audit can regulate the accounting information of audited companies, which can improve the quality of accounting information. In order to research government audit’s function of the accounting information’s quality of listed state-owned enterprises, the paper use the audited listed state-owned enterprises during the financial crisis (2008-2011) as sample.The paper is divided into seven chapters; the main contents are as follows:Chapter1IntroductionThis chapter firstly introduces the background and significance of the topic; then introduces the methods used in the paper and ideas of the research, and briefly outlines the framework of the paper; finally puts forward the innovation of this paper.Chapter2Literature ReviewThis chapter mainly sorts out the domestic and international literature on the quality of accounting information and government audit, finds out the contributions and shortcomings of previous studies, proposes the content and direction of this research, and provides the theory support and empirical research literature support for the following.Chapter3Theoretical Analysis and Research HypothesisThis chapter focuses on the market reaction to the announcements of government audit and the effects of government audit to accounting information quality, puts forward the main problems to be solved, and introduces two hypotheses:(1)Government audit announcement can bring a shortly but significantly negative effect on cumulative abnormal returns of listed state-owned enterprises;(2)Government audit can effectively improve the quality of accounting information of listed state-owned enterprises. Lay the theoretical foundation for the following empirical analyses.Chapter4Market Reaction to the Government Audit AnnouncementThis chapter employs the audited listed state-owned enterprises by government audit in2008-2010as samples. In order to provide empirical support for further expansion of the main research problems, event study method is introduced to test the government audit announcement which can cause a reaction in the capital markets.Chapter5Government Audit and the Quality of Accounting Information of Listed State-owned EnterprisesThis chapter is based on the hypothesis of this study to set some appropriate models. And audited listed state-owned enterprises in2008-2011and non-audited listed state-owned enterprises are used as samples to determine whether the hypothesis is right or not. Through this study we get the empirical results, and also have made an analysis of the results.Chapter6Further TestingIn order to make the results more precise and reliable, this chapter mainly employs the method of principal component analysis and grouping regression method to test the earlier hypotheses.Chapter7Research Conclusions and EnlightenmentThis chapter is the summary of the above, mainly telling the further research directions, and the shortages of the paper.The research question of this dissertation can be further, and future research can have the following four directions:(1)Different audit results announcement reflects the different degree of problems, the paper only studies the audit announcement system which can cause the reaction in the capital market, but serious problems and non-serious disclosed in the audit announcement may cause different extent of reaction in the capital market. This can be used as one of the research directions in the future.(2)Researches on the role of government audit are mostly normative, empirical studies of the role of government auditing are few; the methods of this study can provide a direction for subsequent researchers.(3)Government audit may improve the quality of accounting information of listed state-owned enterprises inseparable of its absolute independence and mandatory, and these are precise CPA and internal audits lacking.Therefore, how to enhance the independence and authority of the CPA audit and internal audit can refer to government audit, such as audit fees, audit means of punishment.(4)Future study can be focused on the difference between government audit report format and folk audit’s. Different audit report format may have different consequences.The main contributions of the paper are as follows:(1)The study is the first time to prove that government audit can improve the quality of accounting information of listed state-owned enterprises. The paper using a variety of methods to verify the government audit can effectively improve the quality of accounting information of listed state-owned enterprises. With the basis of the research of the paper, more empirical researches on government audit can be unfolded.(2)The paper is not only to test one side of the quality of accounting information, but from the accounting conservatism, accounting information transparency and earnings quality three levels measuring on the quality of accounting information, establishes a multi azimuth the quality of accounting information system which contains indexes and negative indexes. To guarantee the reliability and accuracy of the empirical research conclusion, the paper uses the method of principal component analysis and grouping regression method to measure the quality of accounting information from different points of view.(3)The scholars mainly study the role of government audit theoretically. However, this study providing empirical evidence for the government audit to safeguard national economic security, to resist the impact of the financial crisis, has strongly supported the theory analysis conclusion before.The further thought about the paper is as follows:(1)Due to the restrictions of sample quantity, there are only two years data for the listed state-owned enterprises which are audited in year2011and the listed state-owned enterprises which are non-audited. Further research is needed to test whether the sample results are also significant if expanding the sample.(2)Because of the complexity of accounting information quality measurement, completely and objectively describing the quality of accounting information of an enterprise is not realistic. Although the paper describes the quality of accounting information of enterprises from three aspects, but there are some disadvantages inevitably. This needs an improvement.(3)Because the paper is a study about the quality of accounting information of listed state-owned enterprises, so in the selection of explanatory variables, many other factors may play a role in the quality of accounting information, such as political motivation, age, and salary of the manager. Thus the follow-up research can consider the introduction of these variables.