Empirical Research On The Sme Board Accounting Earnings And Cash Flow Information Content

In May17 2004, China's Securities Regulatory Commission allowed Shenzhen Stock Exchange to set up small and medium-sized enterprises board. In the board, the listed companies have smaller scales, greater investment risks and their development are not so stable. These characteristics make them different from the companies in the main board on the aspects of investor groups and investment strategies. As an investor of the small and medium-sized enterprises board, it is necessary to accurately and objectively evaluate companies' investment value according to their financial statements. So it is significance to study on the information content of accounting earnings and cash flows.This paper reviewed relative literatures, and then collected data from the year of 2006-2007 to complete an empirical study. Finally, compared with the samples of main board and got some conclusions, in order to help investors to make decisions, give some policy advices and make reference for the GEM market which to be built soon. The main conclusions are as follows:1. The research demonstrated that the stock price will have strongly reaction, before and upon the disclosure of the accounting earnings information. The positive unexpected earning portfolio can get more abnormal return.2. In the board of small and medium-sized enterprises, the indicator of accounting earnings has information content but the indicator of the cash flows does not. The indicator of cash flows can not give incremental information when using the information of accounting earnings to explain the changes of stock price.3. In the main board the indicator of accounting earnings has information content but the indicator of the cash flows does not. The indicator of cash flows can give incremental information when using the information of accounting earnings to explain the changes of stock price.4. The research also demonstrated that the information content of accounting earnings and cash flows in the board of small and medium-sized enterprises are weaker than these two indicators' information content in the main board.