Research On The Motivation And Market Reaction Of Annual Report Restatements Of Rongfeng Holding Group

High-quality information disclosure can alleviate information asymmetry,and the important way is real and effective annual reports.The national system stipulates that errors or omissions in annual reports should be restated immediately.From 2007 to 2018,the proportion of enterprises in annual reports restated was between 10% and 25%,which attracted the attention of scholars,and many empirical studies were carried out in terms of motivation and market reaction.Rongfeng Holdings is a listed company.The company has repeated its annual report six times from 2008 to 2018.What is the reason behind the frequent restatements? How did the market react? This paper takes Rongfeng Holdings as the research object,studies the motivation and market reaction of its annual report restatement,understands the reasons for the poor quality of annual report,and puts forward some useful suggestions.Firstly,this paper collates the relevant literature.Secondly,it introduces and analyses the annual report restatement of Rongfeng Holdings.Thirdly,it analyses the motivation of the restatement from the aspects of corporate governance and external policy environment.Fourthly,it measures the market reaction of the restatement by using event study.Finally,it gives conclusions.The study finds that the motivation includes maintaining market value,the financing purpose of controlling shareholders,the shortcomings of concurrent chairman and general manager,and the high profit of false information disclosure.In the annual report restatement,2009 and 2010 brought significant positive market reaction,2012 and 2015 brought significant negative market reaction,2017 market reaction was not significant.The restatement of non-financial information will bring positive market reaction,while therestatement of financial information and regulatory requirements will bring negative market reaction.Frequent restatements by enterprises have made the market's response dull.Finally,give four suggestions.This paper uses a single case study to enrich the case study of annual report restatement.Promote companies to improve of annual reports and improve the quality of information disclosure.