Ownership Nature Of Ultimate Controller、accrual Volatility And Probability Of Informed Trading

Disclosure quality is crucial to the effective operation of market economy, whichis also very important to the rational decision made by investors. The rapiddevelopment of information economics theory provides a good foundation forresearch on the quality of information of our capital markets. So far, researches aboutthe information quality at home and abroad are mainly confined to finance field, thereis still relatively few research that put the endogenous information theory to theaccounting field, especially on the aspect of empirical research. This paper attempts tofill this gap. Basing on the relevant research literature at home and abroad, it attemptsto find out influences that different property rights nature and the surplus accrued inthe reports have on enterprise information environment, by using empirical andlogical framework methods.This paper takes709A-share listed companies of Shanghai Stock Exchange fromyear2006to2010as the final study sample. Through the establishment of theregression model of explanatory variables and dependent variables, we examine therelation between the ultimate controller, accrued fluctuations and probability ofinformed trading. First of all, through empirical research we find that the informedtrading level of state-owned enterprises is lower than non-state-owned enterprises onthe whole level. The larger proportion that government own enterprises, the lower thelevel of informed trading, which shows a significant correlation. To make a morerobust and reliable empirical results, we further consider the situation changes ofinformed trading for enterprises of different ownership properties around the reportedearnings announcements.Secondly, we study the information content in reported earnings, both fluctuatedand smoothing ones, especially information effects of smooth earnings and big bath.Through empirical study, we find that when the reporting earnings is smoother thanthe surplus cash flow, more informed trading will occur; When fluctuations ofreporting earnings is greater than cash flow, informed trading also increasedsignificantly. Further, the changes of smoother and more volatile reported earnings aresignificantly related to the changes of Informed Trading. Furthermore, we subdividethe accrued portion of the reporting earnings into discretionary accruals and non-discretionary accruals, and find a significant relation between discretionaryaccruals and informed trading. U-shaped relationship still holds between fluctuationsin the absolute value of the accrued ACEV and informed trading.Finally, in cross-accrual factor analysis of the nature of property rights and thecombined effect of fluctuations, we find that in the non-state-owned holdingcompanies, the accrued part of reported earnings has a higher relevance with thepossibility of informed trading occurrence than that of state-owned enterprises, whereinformed trading occurs more frequently in stock tradings.The paper find that more volatile or smooth earnings report add noiseinformation to the capital markets, which interferes investors’ rationaldecision-making, and its explanatory power is lower than the cash flow fluctuations.State-owned enterprises has a lower degree of information symmetry, betterinformation disclosure quality of earnings announcements, and whose managers areless likely to use private information for self-interest. Strengthening the quality ofinformation disclosure and improving transparency of listed companies to reduceinformation asymmetry have become an important research topic for capital market,this paper tries to provide some empirical evidence for information disclosureregulation of the capital in our country.