The Comparative Study On Listed Company's Financial Restatement Between Shanghai And Hong Kong

Financial restatement is a phenomenon when listed companies find errors in their prior period finance report, it is necessary to restate it, so the original purpose of financial restatement is to improve the quality of finance report. However, financial restatement reflects there is false information in the finance report, which can't express the financial information timely and correctly. Recently, many financial restatements happened in mainland of China capital market, which demonstrate that more and more listed companies take advantage of financial restatement as a legal method to reach their special purpose, these behaviors has ruined investor's profit. Therefore, the purpose of this research is to find effective way to perfect financial restatement system in China mainland, which makes listed companies reduce financial restatement and restate timely.In order to realize the research purpose, the study compares the financial restatement between Shanghai and Hong Kong capital market. First, the writer summarizes the current financial restatement regulation both in Shanghai and Hong Kong, including supervise regulation, accounting principle, disclosure regulation, legal responsibility, and so on. Second, the writer comprises the restatement between Shanghai and Hong Kong, on one hand, the comprise based on the regulation summary, on the other hand, the writer collects the recent data and makes a empirical analysis between Shanghai and Hong Kong. From the analysis, we can see, in Shanghai capital market, the supervise effect is weaker, the probability of accounting manipulation is higher, the majority of investors can't reflect financial restatement information enough, and so on.In the end, the writer gets the conclusion based on analysis, and gives some proposals to financial restatement regulation of China mainland capital market. These proposals include both learn from Hong Kong and advices from the analysis.