Research On The Impact Of COVID-19 Epidemic On The Quality Of Accounting Information

The outbreak of COVID-19 epidemic in late 2019 spread rapidly across the nation.Its effects on people’s daily lives,the production and functioning of businesses,and the steady growth of society were immense,and its ripple effects are unprecedentedly wide in China.Affected by the epidemic,people have changed their original lifestyle,reduced travel and gathering,and significantly decreased consumer demand,which directly leads to a precipitous decline in the income of all industries.At the same time,labor flow is limited,logistics transportation is blocked,raw material supply is insufficient,product sales are not smooth,inventory is overstock,and enterprises have to bear huge fixed expenses,resulting in difficulties in capital turnover of enterprises and forced stagnation of production and operation activities.The epidemic prevention and control measures have hindered the communication between people,hindered the development of field activities,restricted the accounting and auditing work,and affected the quality of accounting information reported by enterprises.The financial situation,operating outcomes and cash flows of an enterprise are reflected in the accounting information.Both the enterprise itself and the capital markets are significantly affected by the quality of accounting information.Businesses can reap the economic benefits of utilizing high-grade accounting data that can be used to guide them in making scientific production and managerial decisions.Investors can make sound investment decisions,sustain the capital market’s order,and foster its flourishing development through the utilization of top-notch accounting data for the capital market.However,in reality,accounting information falsification and other irregularities occur from time to time,and distortion of accounting information is relatively serious.Taking the severe impact of COVID-19 epidemic on enterprises as the entry point,this paper adopts an empirical research method to construct a difference-in-differences model to study the impact of COVID-19 epidemic on accounting information quality in terms of both surplus management and accounting robustness,and further examines the impact of accounting firm heterogeneity,using A-share listed companies in China from2016 to 2021 as the research object.It is found that:(1)There is a clear inverse relationship between the COVID-19 epidemic and the quality of accounting data,leading to a greater likelihood that listed companies will pursue upward surplus management and reduce accounting conservatism.(2)The difference of accounting firms affects the quality of accounting information.Compared with other accounting firms,the quality of accounting information of listed companies whose annual reports are audited by the Big Four international accounting firms is higher and is not noticeably affected by the COVID-19 epidemic outbreak.Finally,according to the conclusions of this paper,corresponding suggestions are made according to different objects,and the problems that remain to be solved in this paper’s research and the directions that can be further researched in the forthcoming future are indicated.There are two innovations in this paper as follows: First,it augments the exploration of the elements influencing the quality of accounting information.Scholars from both domestic and foreign backgrounds are currently mainly focusing on the level of enterprises in terms of the factors influencing the quality of accounting information,whereas research on external factors,particularly emergencies,is comparatively limited.This paper links the COVID-19 epidemic with the quality of accounting information,and studies the relationship between the two,enriching the researches related to factors affecting the quality of accounting information.Second,It provides data support for studies on the impact of COVID-19 epidemic.The majority of studies on the COVID-19 epidemic are currently concentrated on the repercussions it has on China’s macro-economy and the growth of genuine businesses,as well as what steps should be taken to counter it,and most of the analysis was at the theoretical level.There is less research on how to affect the quality of accounting information.A difference-in-differences model is constructed in this paper,utilizing empirical research methods,to quantify the correlation between the COVID-19 epidemic and the quality of accounting information,as well as to measure the effect of the epidemic on the quality of accounting information.