Research On Financial Restatements Based On Corporate Governance

The financial restatement is an accounting method for tracing back to adjust and re-publishing to the profit and loss of a company in the past accounting period. Since the last mid-90, regulatory auditor and academics have paid more attention to financial restatements. Finance restatements are publicly announced in the form of holding announcement such as complementarity and correction bulletins that can make more or supplement to the annual financial statement, half a year or monthly report. It usually means that there are possible error or neglect in the originally annals, and even badly,it sometimes becomes a good choice of managers to manipulate profits which will constitute a graveness influence to the companies history profit and loss conditions, and change accomplishment trend, then influence investor decision, and cause the violent motion of stock price. Therefore, we intends to view restatement as the low quality expression of accounting information. This paper makes an study and analyzes on financial restatements and the influence corporate governance give it. The elements of corporate governance concerned include ownership structure, executive pay,board characteristics,external audit and supervision of institutional investors. The objective of this paper is to set up a better corporate governance model which can improve the disclosure quality of financial accounting information .The whole thesis consists of six parts:The first part, the preface. In this part, it is illustrated the background, meaning, ideas, methods, frameworks, and possible innovations of the research.In the second part, institutional background of financial restatements.It is divided into three sections to illustrate: related concepts, the provisions of financial restatements system of listed companies in the United States and the development of financial restatements of China.In the third part, literature review. The writer sums up the study about financial restatement and makes conclusions and outlook,using them for reference.In the forth part,study design. The writer designs this research:making hypothesis, choosing and describing samples and defining variables.In the fifth part, empirical research and analysis. The paper makes an empirical study and analyzes on influence to complementarity and correction bulletins for annals by corporate governance through single variables test and multiple variables logistic regression test.Finally, conclusions and limitations. Concerning the present situation in our country, the author proposes some recommendations to solve the problem , including recommendations to introducing more institutional investors,to improve the appointment system of independent directors, to improve the external governance structure of listed companies.