An Empirical Study Of The Influence Internal Control Quality Has On Financial Restatement

Financial restatement is the process of enterprises revising previous published financial statements in order to display its error-corrections.In recent years,the phenomenon of financial restatement is increasing gradually,the problem of financial restatement is also receiving wider attention of scholars both at home and abroad.The financial information of companies is one of the most important factors for investors to make investment decisions,the increasing frequency of financial restatement of listed companies may cause damage of investors' interests to some extent,and it also reflects the problem that the financial information quality of some listed companies in our country need to be strengthened at once.Study the problem of financial restatement can alleviate the problems of companies' low disclosure quality and investors'information distortion to a certain extent.After reading and learning related literature and theories at home and abroad,picks Internal Control Quality as explanatory variable,and picks Economic Cyclical Fluctuation as moderating variable to study the phenomenon of financial restatements.Internal control quality is one of the important factors of a firm's information disclosure quality,hence,it is one of the significant internal factors of financial restatement.As an important part of the market environment,economic volatility and economic cyclical fluctuation can generate certain effect to enterprises.Therefore,this article study how internal control influences financial restatement firstly,and on this basis,analyzes the moderating effect of econormic cyclical fluctuationAs for empirical study,selects A-share companies listed in Shanghai Stock Exchange and Shenzhen Stock Exchange as study samples from 2009 to 2016,and gets empirical data through collection,statistics and calculation of sample companies.Processes collected data using descriptive statistical analysis,mean T-test,variable correlation test,multiple linear regression analysis and robustness test.After the empirical analysis,summarizes the following conclusions;first,the quality of the company's internal control has significant negative impact on financial restatement;second,economic cyclical fluctuation has the moderating effect on the impact that internal control quality has on financial restatement,the better macro economy gets,the more strengthened impact internal control quality has on financial restatement,the worse macro economy gets,the more weakened impact internal control quality has on financial restatement.Finally,according to the research conclusion,summarizes some enlightenment from two aspects including investors and companies,puts forward some suggestions considering from different perspectives,and points out the insufficiency and the expectation of its future research.