The Effect Of Financial Statement Comparability On The Risk Of Stock Price Crash

Since late 20th century,when Shanghai Stock Exchange and Shenzhen Stock Exchange were established,China's stock market has witnessed bubbles and crashes.At present,researches on the risk of stock price crash are based on the information asymmetry theory.The results show that the management conceals the negative news which continues to deteriorate until a concentrated release,leading to a price crash.Studies on the impact of the comparability of financial statements to stock price crash and relevant researches in China are scarce.By studying the impact of comparability of financial statements on the risk of stock price crash,this paper has certain factual and theoretical significance to stabilizing the stock market,improving the efficiency of resource allocation in the securities market and protecting the investor interests.This paper analyses the theory of risk of stock price crash at home and abroad,and the methods and results of financial statement comparability influencing stock price crash risk.Data from public companies in China from 2009 to 2014 are used to support the theory.The results show that:(1)Raising the comparability of financial statements of public companies can significantly reduce the stock price crash risk when the information disclosure system is imperfect and the management of public companies hides the negative news at their own interests;(2)As an important participant in the security market,the analysts play an important supervisory role,partly making up for the lack of government supervision,to reduce the negative correlation between the comparability of financial statements and the risk of stock price collapse;(3)Because of the special-owned nature,state-controlled public companies are relatively strictly regulated,and taking more of the political,economic task,and their inner promotion system are also special.These reasons reduce the suppressing effect on the risk of stock market crash risk by the financial statements comparability.In the end,the paper puts forward the relevant revelation and suggestion according to the research results.