Research On Market Reaction From Correcting Notice Of Annual Report Of The Listed Companies

To improve the information disclose of the listed companies is the basis of the effective operation and healthy development of the securities markets. With the establishment of securities market, the relevant departments--the National People’s Congress Standing Committee, Ministry of Finance, Securities Regulatory Commission, enacted a series of laws and regulations, initially formed China’s basic norm of the listed companies information disclosure. But in recent years the annual financial report restatement phenomenon appears again and again, caused the attention of domestic scholars. These scholars have conducted a series of studies, and obtained a certain result. The thesis, based on the summary of the former research, in terms of the fact that the correcting notices have a high proportion and great harm, makes the correcting notices as the main research object.Using a sample of the correcting notices to annual reports of Chinese shanghai A-share listed companies released from2008to2011, this thesis conducts a normative research and an empirical research on the market short-time reaction from correcting notices of listed companies and the different reaction of different correcting notices.The paper is consisted of the following six parts:Part Ⅰ. Introduction, including the research significance, the related concepts, the study method and structure, the relevant laws and regulations, and the present situation of annual report restatement.Part Ⅱ. Summarize the domestic and foreign literature of annual report restatement to lay the foundation of the following study.Part Ⅲ. Theory analysis, including the Bias decision theory, adverse selection and signal transmission theory, then presents the study hypothesis.Part Ⅳ. According to the research purpose, the thesis designs the research, including event study method. Part Ⅴ. This thesis, using the event study method, calculates the cumulative abnormal returns(CAR) in the announcement period of correcting notices and carries on the single sample mean test and multiple regression analyses. Research results show that, on the whole, correcting notices of annual report of the listed companies have a certain negative impact. But different correcting notices have different impacts, in which the good news cause positive reaction and the bad news cause negative impact, as well as correcting notices of different time spans have different market reaction.Part Ⅵ. On the support of research data, the thesis gives a few suggestions. Recommendations focus on strengthening the restatement specification and timely, in order to guarantee the quality of information disclosure and ensure the interests of invests.