Research On The Influence Of Financial Statement Inquiry Letter On Earnings Quality Of Listed Companies

The earnings quality of listed companies plays an important role in ensuring the orderly operation of the capital market.High-quality earnings information helps to improve the decision-making efficiency of investors.Therefore,the earnings quality of listed companies has always been concerned by regulators,investors and other market participants.The report of the 19 th national congress of the communist party of China(CPC)stressed the need to "transform government functions and innovate supervision methods",which reflected the transformation of China's securities market supervision system from government supervision to market supervision.In view of the irregularities or misinformation in the financial reports of listed companies,the Shanghai stock exchange and the Shenzhen stock exchange began to implement the financial report inquiry letter supervision measures in 2013 and 2014 respectively,as one of the main ways of post-supervision of financial reports and non-administrative penalty supervision measures.This paper takes the listed companies that received the inquiry letters of financial reports from the stock exchange from 2014 to 2018 as the research samples to test the regulatory effect of the inquiry letters of financial reports on the earnings quality of listed companies.The results show that :in general,the earnings quality of listed companies has improved after receiving the inquiry letter of financial report,but the effect is not significant;distinguish different subjects of issuing letters.Compared with Shanghai stock exchange,Shenzhen stock exchange can better improve the earnings quality of listed companies by issuing financial report inquiry letters and effectively play its front-line regulatory role.Based on the above conclusions,this paper further took listed companies in Shenzhen as research samples and found that : compared with the state-owned listed companies,the earnings quality of the non-state-owned listed companies significantly improved after receiving the inquiry letter,indicating that the financial report inquiry letter can play a more regulatory role for the non-state-owned listed companies;the more questions contained in the inquiry letter,the more obvious the promotion and improvement effect of the earnings quality of the listed company is,indicating that the more questions,the more regulatory role of the financial report inquiry letter can be played;the inquiry letter issued by the exchange can not only restrain the earnings manipulation of the current financial report of the listed company,but also have an impact on its earnings quality in the future.That is to say,the supervision measures of thefinancial report inquiry letter have a certain deterrent effect on the subsequent earnings manipulation of the listed company.Based on the above findings,this paper proposes :(1)Strengthen the punishment of violation of listed companies.Because the non-administrative penalty is not compulsory and binding,it is necessary to increase the punishment and raise the cost of the listed company;(2)further improve the quality of financial reports of state-owned listed companies.The governance structure of state-owned listed companies should be further improved to improve the level of corporate governance.At the same time,non-administrative penalty supervision indicators should be added to the assessment indicators of leaders of state-owned enterprises to improve the quality of financial reports;(3)Improve the coordination between the systems,so that the quality of financial reporting supervision measures form a synergy;(4)Shanghai and Shenzhen stock exchanges should strengthen communication,learn from each other,and jointly explore effective ways to improve the effect of supervision measures on financial report inquiry letters.