Research On Financial Restatement Of S Company

Listed companies reflect operating performance by disclosing financial information,The users make the right decision about.However some of them may show fictitious financial information to the public due to the financial difficulties and avoiding delisting,others,like the management,who apply the financial restatement then complete the supplementary correction on purpose,may be driven by personal benefits,which reduces the quality of the information mentioned above,damages investors’ interests as well as affects capital market’s development.Hence,it is motivation,ways and economic consequences of financial restatement that attract public’s attention.This paper selected chemical raw material manufacturing industry S company as the research object.Firstly,relevant literature of the financial restatement would be reviewed.The case background of S company would be introduced after summing up the overall environment as well as current situations of the financial restatement on Chinese listed companies,then the financial restatement condition in S company could be analyzed.In the meantime,descriptive statistical method would be not only applied to analyze S company’s financial data from 2012 to 2018,but also studied its operating performance and financial status,then explained reasons that S company got trapped on the base of Dupont analysis system.Thirdly,it analyzed three aspects of the motivation of S company’s financial restatement,means of inflated income via financial restatement to inflated income and economic consequences of financial restatement.Finally,it explored the inspiration obtained from this caseIt is found that the frequent financial restatements of listed companies in China and the poor overall environment both have a certain impact on the financial restatements of S company.The chemical raw material industry of S company is in a recession,and its operating conditions are also affected seriously.The sales revenue has dropped significantly,and the company has made restatements for 9 times from 2012 to 2018.S company made financial restatement in order to alleviate financial difficulties and obtain financing,dissimulate earnings management behavior and avoid delisting risk.The use of financial restatement to falsely increase revenue and then increase profits,so that the key years to return to profit,successfully survive the delisting crisis.At the same time,the financial restatement also brings a lot of negative consequences,causing a lot of lawsuits to affect the corporate image,covering up the business decline caused the resources waste,until the material asset restructuring into shell resources.To sum up,the financial restatement of S company is a "double-edged sword",which has completely descend to shell resources after getting out of financial difficulties.There are various affordances such as having the assistance of government policy,optimizing corporate ownership structure,paying great attention to talent cultivation,strengthening external supervision and increasing the environmental protection from it.And it can provide new ideas and perspectives for the listed companies to prevent the occurrence of financial restatement.