The Study On Accruals Anomaly Based On The Investors’ Limited Attention &the Quality Of Financial Information

Financial information is an important source of information for investors to make decision. Accounting earning in a financial report includes two parts, namely accrued surplus and cash flow. The phenomenon of making use of the persistent difference of accrued items and cash flow to involve in arbitrage and obtain excess earnings is called accruals anomaly which mainly results from the limited attention of investors, the differences of the quality of financial information, the different growth of enterprises and so on. Studying the existence and the cause of formation of accruals anomaly is conducive to discovering the anomalies in the capital market of China, taking actions to eliminate anomalies according to its cause of formation and standardizing market development.The paper takes accruals anomaly in the capital market of China as the research object and conducts a study on accruals anomaly from the perspective of the limited attention of investors and the quality of financial information based on the theory of market inefficiency. The research process follows the basic idea of “raising a question- theoretical analysis- empirical research-conclusion and suggestions”. Based on concluding and teasing the existing theoretical results of accruals anomaly and analyzing the deficiencies of research in China, the paper firstly analyzes that the problems in the securities market of China are the reason for the existence of accruals anomaly, and the attention of investors and the quality of financial information exert an influence on accruals anomaly from the perspective of theory. Secondly, the paper chooses a reasonable indicator variable from the limited attention of investors and the quality of financial information, establishes an OLS multiple regression analysis model and empirically tests the influence of the above two factors on accruals anomaly. Finally, the paper gives a suggestion on how to reduce and eliminate accruals anomaly and comes to a research conclusion from the perspectives of investors and national macro management, enterprises and society.The paper has obtained several research findings. Firstly, the study on accruals anomaly in China has not reached a unified conclusion and is still the research hotspot of market anomaly. In addition, it is urgent to attempt to study the reasons why accruals anomaly exists in China from many perspectives and factors. Secondly, verifying the remarkable accruals anomaly in the securities market of China raises a more urgent demand for the academia and practical circle to deeply study the issue of accruals anomaly. Thirdly, the attention of investors has a deep influence on accruals anomaly. The paper adopts the proportion of shareholding of institutional investors to measure the attention of investors and arrives at a conclusion that quickening the development pace of institutional investors, expanding their development scale and improving their development quality are beneficial for the securities market of China to develop in a mature and stable direction. Fourthly, the quality of financial information is the underlying reason for influencing accruals anomaly and plays a crucial role in propelling institutional investors to slow down accruals anomaly. Therefore, it is supposed to take various measures simultaneously so as to improve the quality of financial information of listed companies and promote the sound and orderly development of the securities market of China. Fifthly, the countermeasures and suggestions on reducing accruals anomaly are raised from the perspectives of macro and micro according to the theoretical analysis and empirical results of the paper, which has certain reference significance for investors to make correct decisions and provides helpful references for companies to improve the level of governance and China to further perfect the development of the securities market.