Investments In Securities Based On Accounting Information Risk Prevention

The security market of our country has being developed for more than two decade years, and has made great progress in some aspect. The scale of security market is unceasingly expanding, the system is continually standardizing, the structure of investors had great changes and the proportion of organization investor is increasing. Compared with the developed country's security market, our security market is still not mature. Investors also face with some risk while they gain income. As one of being direct using information, accounting information decides investor's investment decision-making to some extend. There is some relation between accounting information and security investment risk. Some market participants, such as listed company and intermediaries will normally processing accounting information for their own benefit to mislead investors, thus obtaining additional income, so that investors suffered serious losses, and bring to a great risk of their investment. As to investors, the security investment risk, especially those being based on the accounting information, is a very important and urgent problem to solve. To be saying that the analyses based on the accounting information can provide another method of appraising risk for investors, even can forecast the future risk with the aid of information in the financial statement. The writer tries to help investor to prevent from the security investment risk and enhance the ability of defending risk.There are four parts in this paper. The part one is the introduction, including mainly the background of research,related literature summary and paper's frame. In part two, the writer illustrates the concept of accounting information and securities investment risk, and analyses their relations so as to build the foundation for the later analysis. In part three, the writer mainly elaborates the reason of formatting the security investment risk based on the accounting information from different stratification. From the investor's level, the writer believes that one of the reasons of formatting the security investment risk is the investor's non-rational behavior in using the accounting information. At the same time, the writer also does it from exterior factors, such as the accounting information market, the accounting firm and the law. In part four, on the basis of analyses the reason of causing investment risk, the writer proposes related countermeasures and suggestions as for how to guard against the security investment risk. This paper holds that it is essential to foster investor's rational investment, and they should master the necessary means of false identification to avoid investment risks. For some external factors which effect accounting information, it is effective measure to resolve the contradiction between accounting information's supply and demand, and the information distortion of conduction process that perfecting the accounting market. And the paper also put forward the idea of establishing the competition and supervision mechanism among different intermediaries to improve the CPA's auditing quality.