The Study Of Listed Companies’ Financial Restatements Problem In China

In recent years, the phenomenon is more and more frequent financial restated getting worse. In the United States, the company’s financial restated happened that the number of the proportion of the listed companies is not high, but the financial restated the number of listed companies and the proportion is rising year by year. Financial restatements in China securities market is also very serious.Since the Chinese stock market has established, the listed company earnings manipulation and release the false accounting information is often appear.In China’s capital market financial restatements ratio not happened low, and China’s listed companies added that matters more than half and profitability, reflecting the financial information disclosure of the listed company not normative and capriciousness, and part of the listed company financial added the correct way to whitewash the announcement of the financial information malicious. There are many institutional and practical issues worth further studying.Along with the rapid development of China’s economy, the increasing maturity of the capital market, capital market supervision system of further perfecting that led to the requirements of the quality of the accounting information disclosure more and more is also high. Financial reporting is the chief carrier that the companies disclose the information to the public, and the main approaches of investors getting the information. There is situation in reality that the companies find fundamental accounting error or missing in the previously released annual report. Thus the financial restatements turn up. The term "financial restatements" refers to the behavior that listed companies restate their previously published financial reports when they discover and correct errors of prior periods. Recently, investors and capital markets all over the world are mislead by many of the financial statement restatements, which has resulted in the inefficiency of resource allocation. As a representation of the listed firms’earnings manipulation, financial restatements mirror the weaknesses and low efficiency in corporate governance mechanism. The financial statement restatements, to some extent, have shaken the confidence the investors have on the financial reporting system. As to grasp the information disadvantaged investors will become the victims, of the interests of investors received violations and threats, also can make investors for the information revealed always skeptical, of the listed company, and the stock market lost confidence, so information disclosure quality is good or bad, just become a legitimate interests to protect investors, maintain order in the securities market good key.The front of the thesis is the preface, which presents the background and motivation of study and the research status of the financial restatements, and then states the research method and frames structure of the article. There are four parts of the text, which discuss step by step as below.The first part describes the basic theory summary of financial restatements. It mainly introduces the basic concepts of financial restatements, features, relevant concepts and economic consequences. Then it reviews the theoretical basis of financial restatement:the principal-agent theory, internal control theory, etc, excepting to provide theoretic support for the study. The second part is the current situation and problems of China’s listed companies’financial restatement. It compares the historical evolution of domestic and foreign financial restatements. Then it uses the numbers and figures to describe the situation of China’s listed companies’financial restatement, and on the basic points out the problems of China’s listed companies’financial restatements. The third part analyzes the reasons why is the problems of China’s listed companies’ financial restatement. Accounting and corporate governance is the link between system and environment, the relationship between the structure of company treatment is a whole environment, the accounting information system is one of the subsystem, the two need to coordinate each other to help targets. It analyzes the reasons of China’s listed companies’financial restatements from corporate governance, mainly including the equity unreasonable and imbalance of internal corporate governance, etc. The forth part is to improve our country’s financial restatements system. This chapter is based on the research that listed above. It puts out the measures and suggestions to reduce the likelihood of financial restatements from the perspective of improving the listed company corporate governance structure, for example reasonably configuring the shareholding structure, strengthening the company’s internal governance, improving the internal accounting control mechanism, advancing market supervision mechanism and improving the listed company’s financial restatements legal mechanism.