Financial Statement Comparability?Auditor Industry Specialization And Stock Price Crash Risk

Since the 20 th century,the phenomenon of "plummeting" in the capital market has aroused widespread concern in academia and practice.The frequent collapse of stock prices has seriously affected the stability of capital markets and the economic development of various countries,exacerbated market volatility,severely affected the stability of financial markets and even triggered an economic crisis.Therefore,there has great significance to study the influencing factors of the stock price crash risk.The stock price crash risk refers to the probability that a market index or individual stock price will drop abruptly without any indication of information.It brings great impact and destruction to the personal wealth of investors,the smooth operation of capital market and the healthy development of economy.By the theory of principal-agent,managers often seek to maximize their own interests.Therefore,managers will conceal the negative information of the company for their own interests,and when the negative information accumulates to a certain extent and focus on the outbreak,it will produce a jump in stock prices,which is why the stock price crash.The risk of a stock price crash has been relatively mature in the capital market and the western developed countries with relatively complete systems have had a serious impact,while our country faces more serious problems.All the rules and regulations of the capital market in our country are imperfect,the problem of information asymmetry is more serious,and managers have a stronger incentive to profit from hiding the negative news of the company.Therefore,in-depth analysis of the inherent causes of the stock price crash risk and its governance mechanism will help prevent and resolve financial risks,promote the stable development of the stock market and optimize the efficiency of resource allocation.A lot of domestic and foreign literatures have made many studies to the impact of stock price crash risk research.Accounting information comparability as one of the important characteristics of accounting information quality,it means that when the economic business is the same,different subjects of accounting information should be able to show the same situation;the contrary,when the economic business is different,accounting information can also reflect the difference.The main function of the comparability of accounting information is that it can make different projects be better compared to accounting information between the higher constitute a better basis for comparison,the information transmission between these companies will be stronger.Thus,the comparability of accounting information plays an important role in mitigating the asymmetric information,helping investors better understand the real situation of the company and improving the effectiveness of capital market.So whether the comparability of accounting information can help reduce the stock price collapse risk? External audit,as an important part of external governance,can help auditors to better identify the information manipulation behavior of the audited company and improve the quality of financial statement information.So,the audit industry expertise can further promote the comparability of accounting information on the stock price crash risk inhibitory effect?Therefore,based on the sample of A-share listed companies in China from 2005 to 2014,this paper explores the impact of the comparability of accounting information to stock price collapse,and how the audit profession expertise will influence the relation.In order to carry on the research to the above-mentioned questions,this paper first reviews and finishes the relevant literature both at home and abroad,and tries hard to grasp the present situation of the research both at home and abroad.Secondly,it sorts out some basic theories related to the research questions in this article,the basic theory of logic analysis and put forward two hypotheses in this article.Then,building a regression model of the two hypotheses and analysis the empirical results.Finally draw the conclusion of this article.This study finds that the higher the comparability of accounting information,the smaller the risk of its stock price crash,that is,the comparability of accounting information can significantly reduce the risk of stock price crash.When auditing the company's firms with industry expertise,the risk of crashes is more strongly dampened by the comparability of accounting information.That means the audit profession expertise significantly enhances the inhibitory effect of the comparability of accounting information on the risk of a stock price crash.The result of this paper shows that the risk of stock price collapse is mainly caused by the information asymmetry and principal-agent problem.Compared with the developed capital markets,in our country,the capital markets development time is short,the legal system is imperfect,and there is a lack of effective market supervision and the investors are immature.In general,the economic system in our country still needs improvement.Under such circumstances,it is particularly important to reduce the degree of information asymmetry,to improve the quality of accounting information and delivery to the smooth development of China's stock market.Comparability of accounting information as an important measure of the quality of accounting information,comparability of accounting information can improve the quality of accounting information of enterprises,reduce the degree of information asymmetry between management and investors,ease the principal-agent problem and reduce the risk of stock price collapse.Audit expertise helps auditors better find out the existence of enterprise information manipulation,thereby enhancing the quality of audit to ensure the quality of financial statements and information to further alleviate the problem of information asymmetry and agency.Therefore,the audit profession expertise also plays an important role in the relationship between the comparability of accounting information and the risk of stock price collapse,which can enhance the inhibitory effect of comparability of accounting information on the risk of stock price collapse.