The Relationship Between Financial Report Complexity And Earnings Value Relevance

As an important bridge to transmit relevant information to investors,the understanding and digestion of investors on corporate value and annual report information will have a direct impact on the efficiency of resource allocation in the capital market.With the increasing complexity of accounting standards and the increasing content of disclosure,China's financial report is becoming more and more complex.The length of financial report is lengthy and the technical terms are obscure,which makes its complexity and readability worse.China Securities Regulatory Commission(CSRC)has also constantly revised the standards for the content and format of information disclosure by companies offering securities to the public No.2-the content and format of annual report.It can be seen that the conciseness and readability of financial report have been widely concerned.In this context,the research results on the complexity of financial reporting need to be expanded,and what impact it will bring to the capital market,companies and investors deserves attention.Therefore,this paper selects the data of 196 companies in the pilot list of mixed ownership reform in 2014-2018 as samples,and uses the price model to empirically test the relationship between the complexity of financial reporting and the relevance of earnings value.The results show that:(1)the lower the complexity of financial report,the better the readability,and the higher the correlation of earnings value.(2)The higher the degree of mixed ownership reform is,the stronger the positive relationship between the complexity of financial reporting and the correlation between earnings value is.As an inevitable trend of the reform of state-owned enterprises,the increase of non-state-owned shareholders has increased the diversity of shareholder nature and the proportion of non-state-owned shares,played a role of checks and balances on state-owned capital,brought the vitality of enterprise competition,made investors more willing to rely on the company's financial reports,and applied the information obtained to investment decisions,so as to reflect on the stock price.Under the background of mixed ownership reform of state-owned enterprises,this paper explores the research on the complexity of financial report and the relevance of earnings value,advocates the simplification of information disclosure,provides experience support for improving information efficiency of capital market and the reform direction of mixed ownership reform of state-owned enterprises,and improves the equity allocation,corporate governance and information disclosure of mixed ownership reform of state-owned enterprises And improving the information efficiency of capital market has important policy implications.