Scale Of Accounting Firm,Quality Of Information Disclosure And Risk Of Stock Price Collapses

The stock price crash is a phenomenon in which the stock price of individual stocks in the capital market or the overall market index suddenly fell sharply without warning.China's capital market has been set up for a short period of time,and the relevant system has not yet matured.The stock market has experienced four major market share price crashes from 1998 to 2015,and the stock price crash of individual stocks is even more numerous.The stock price crash has caused serious losses to investors,listed companies and capital markets.In recent years,it has become a hot issue in economic research.The stock price crash resulted from the company's hiding in bad news.The company's executives covered their negative news because of self-interested incentives and market optimistically overestimated the stock price.When the negative news accumulates to reach its limit,it will all release to the market.Lots of negative news caused the market to react fiercely to the stock price,triggering a stock price crash.At present,there are quite a lot of literatures on the influencing factors of the stock price crash.However,few documents start from the audit institutions of listed companies and study the impact of audit institution characteristics on the stock price crash risk.The accounting firm is a third-party organization that provides financial reporting audit services for listed companies.Audit reports issued by accounting firms of different scales have different information content,and investors in the capital market will also have different reactions.The larger the size of the accounting firm,the reputational effect it has will form a certain deterrent and constraint on the management of the listed company,which in turn reduces the management's behavior of concealing bad news from self-interested motives and improves the disclosure quality of listed companies;The larger the accounting firm's size,the higher the quality of the audit services it provides,which enables it to identify and disclose the bad news that management is trying to hide.In summary,the firm's size represents the auditor's reputation and audit quality,but the firm's size has a more direct and meaningful impact on the capital market,and it cuts in from the size of the accounting firm's scale to study the impact of the audit firm's audit on the stock price crash risk.Has considerable theoretical and practical significance.This paper selects stocks of 9290 listed companies in the A-share market between Shanghai and Shenzhen Stock Exchanges between 2010 and 2015 as a sample,and conducts an empirical study on the correlation between the size of the accounting firm engaged by the listed company and the stock price crash risk..The study found that the larger the scale of the accounting firm hired by a listed company,the lower the risk of a stock price crash,and the higher the quality of information disclosure,and verified the intermediary role of information disclosure quality in the relationship between the size of the accounting firm and the risk of a share price crash.The conclusion is still valid after the robustness test.The research results provide a theoretical basis for the listed company to hire a large-scale accounting firm for auditing and provide reference for the supervi(?)on and supervision departments to implement relevant policies.