Ownership Type, Further Offerings Of Shares And Financial Restatement

In recent years, financial restatement phenomenon of our country listed firms is increasingly frequent and presents the rising trend. However, numerous studies have shown that financial restatement tends to have many adverse consequences for listed firms:market value "evaporation", the company reputation damage and the high costs of litigation and compensation. So, what prompted the increasingly frequent financial restatement behavior of listed companies? Whether the ownership type do impact on listed firms’ behavior?So based on Chinese listed firms which published supplement and correction statement in A share market between 2010-2012,this research investigates the relationship between ownership structure, further offerings of shares and financial restatement systematically by logit regression analysis method. Studies have shown that with the growing demand for the funds, the listed companies tend to use financial restatements to achieve their financing goals; compared with non-state-owned enterprises, the financial statements of the state-owned enterprises are more likely to occur financial restatement; considering further offerings of shares and ownership type at the same time,non-state-owned companies tend to risk manipulating earnings for scarce refinancing rights. After attaining equity refinancing goals, these firms exploit financial restatement for escaping lawsuits and regulatory punishment because of the government regulators’unfair treatment in the refinance qualification examination and approval.Compared with the previous research, contribution of this paper is mainly in the following several aspects:(1) investigating the motivation of financial restatements from the perspective of equity refinancing needs;(2)existing literature on the study of financial restatementjust separately present the influence of the equity refinancing needs and the ownership type on company’s financial restatement behavior, however this paper investigates the influence of ownership type on enterprise’financial restatement after considering the equity financing needs; (3) this paper enriches the research field of chinese financial restatement,studying the behavior of financial restatement of listed firms from the perspective of further offerings of shares and ownership type, and corresponding countermeasures are put forward in order to avoid the adverse effects of financial restatement;(4) providing ideas to improve the system of our country financial restatements through the study of restatement motivation and restatement enterprise’ ownership type;(5)enhancing the quality of listed companies information disclosure,establishing investors’confidence and strengthening government regulation.