An Empirical Study On The Impact Of Customer Importance And Firm Reputation On Financial Restatement

Financial restatement is a remedial measure to correct or supplement the previously disclosed report after the company finds the defects or omissions in the previous financial report,so as to improve the quality of accounting information.However,with the development of the capital market,the financial restatement of listed companies in China becomes more and more frequent,and becomes one of the means of financial fraud,which seriously affects the reliability of accounting information,and is accompanied by a series of adverse economic consequences,such as stock price decline,loss of investor confidence,regulatory litigation expenditure and even the complete bankruptcy of the company.Therefore,the study of financial restatement has been a hot topic in academic circles.On the other hand,as an indispensable part of the external corporate governance mechanism,CPA audit has become an important guarantee for the quality of accounting information of listed companies and an important force to protect the public interests and regulate the order of market economy.However,in view of the financial fraud cases of listed companies that broke out frequently at home and abroad in recent years,the more regular misstatement of company statements is a reflection of the dereliction of duty of audit supervision performed by accounting firms.By reviewing relevant literatures at home and abroad,it is found that most of the current studies only consider the impact of corporate internal governance mechanism on financial restatement,and few academic achievements on the relationship between CPA audit and financial restatement are involved.So,whether auditor independence by certified public accountants to important customers economic dependence affected by negative,low quality of auditing services can lead to the financial restatement behavior of listed companies,and certified public accountants will be set up with a brand reputation to provide high quality audit services to suppress the customer importance influence on the behavior of financial restatement became the focus of this article.According to the above research background,this paper focuses on the relationship among customer importance,firm reputation and financial restatement by using the methods of literature research,normative analysis and empirical analysis,and expands the exploration field of the correlation between financial restatement and independent audit.Firstly,through literature research and normative analysis,this paper systematically sorts out and summarizes the domestic and foreign academic researches on the motivation and influencing factors of financial restatement,the correlation between customer importance and financial restatement,and the correlation between firm reputation and financial restatement,so as to find the gaps or breakthroughs in this research field.In addition,based on principal-agent theory,rent-seeking theory,game theory and reputation theory,the relationship between customer importance,firm reputation and financial restatement is discussed in depth,and three research hypotheses are proposed.That is,if other conditions remain unchanged,the more important the accounting firm is,the greater the possibility of financial restatement will be.Companies audited by the "big four" international firms are less likely to have financial restatements;The reputation mechanism of firms has a significant inhibitory effect on the relationship between customer importance and financial restatement.Secondly,SPSS 22.0 software was used for empirical analysis.Are analyzed in this paper,using Logistic regression model to the financial restatements(Restate)items are to be explained variable,customer importance(CI),accounting firm reputation(Big4),and cross terms of the two(CI×Big4)as the explained variable and set a series of control variables,on this basis,according to the proposed research hypotheses empirically.Then,based on the empirical results,the conclusions are drawn and the robustness test is carried out.The empirical results show that the more important an audit client is to an accounting firm,the greater the probability of financial restatement of that client.Firm reputation can effectively reduce the occurrence of corporate financial restatement and reputation mechanism can inhibit the relationship between customer importance and financial restatement.Finally,on the basis of the research conclusion,in order to improve the competitiveness of the accounting firm,tangible play its verification economic responsibility of the business,and promote the benign competition and healthy development of China's audit market,this article from the perfect external supervision environment,cultivating firm reputation mechanism and strengthen the firm business three aspects put forward countermeasures and Suggestions for quality control.