Research On The Impact Of External Earnings Pressure On Financial Restatement

The financial reports which are regularly disclosed by listed companies are an important way for investors to understand the situation of the company,it plays an important role in alleviating the information asymmetry in capital market.However,in recent years,the frequent financial restatement has made the community to question the quality of financial reporting information.Financial restatement was originally to solve the error in the disclosure of information,to avoid providing the wrong information to the outside world,but now the financial restatement's speed and frequency of listed companies is far beyond the normal range,it is necessary to explore the hidden motives behind financial restatement.At the same time,the analyst's analysis reports have become an important reference for investors to make investment decisions,and the earnings forecasts published by analyst have also become an important market expectations for listed companies,when there is a gap between the analyst's earnings forecast and the management's expectations,it brings the profit pressure to the enterprise.It proceeds from the market expectations perspective,this paper uses the method of combining theoretical analysis and empirical test with the help of efficient market hypothesis,asymmetric information theory and behavioral finance theory,to explore how the external earnings pressure effect on financial restatement.Moreover,the article examines the effect of external earnings pressure on financial restatement under different analysts attention and media environment.There are five parts in this paper.The first part is the introduction,which is based on the reality of the market situation,analyses the significance of this article,and reviews the financial restatement motivation,the characteristics of the financial restatement company and the economic consequences of external earnings pressure.Moreover,the paper describes the whole research's ideas,methods,innovation and features.In the second part,we mainly to define related concepts involved in this study,and expound the theoretical basis of the full text analysis.The third part is the system background,theoretical analysis and assumptions.This part firstly introduces the development of our country's financial restatement system,the present situation of financial restatement in China and the development of the analyst's industry.Then,it discusses how external earnings pressure affect the financial restatement,and the regulatory mechanism of the analysts' attention and the media environment.Basing on the analyzing,the research hypotheses are put forward.The fourth part is the empirical test,selected A-share listed companies from 2009 to 2015 in Shanghai and Shenzhen stock markets as sample.Using Logit and Probit regression methods to test the hypotheses of this paper,and the robustness test is carried out by using traditional matching method,PSM and graphic method.The fifth part is the conclusions and policy recommendations.The research results show:(1)There is a significant positive correlation between external earnings pressure and corporate financial restatement,it indicates that the external earnings pressure can make an obvious stimulation on management behavior,especially in the management expectations lower than the analyst earnings forecast.(2)Analysts' attention and the media environment can play a role of regulation,weakening the positive impact of external earnings pressure on financial restatement,it suggests that both analysts and the media play an important role in external corporate governance.This study expands the range of the research on the behavior motivation of listed companies' financial restatement,and provides some help to improve the development of financial restatement system.At the same time,this paper also enriches the research experience of external earnings pressure under the background of China's capital market,in order to provide some reference for the follow-up study.