Media Coverage And The Quality Of Accounting Information

Accounting information is a bridge between listed companies and investors, the low quality ofaccounting information not only impair the investor’s profit, but also hinder the development of the capitalmarket. Therefore, how to improve the quality of accounting information of listed companies has becomemore and more important. With the rapid development of the media, the media coverage becomesimportant macro governance environment of listed companies, and its impact on listed companies graduallyattracted the attention of scholars. On the one hand, the media reports improve the market’s informationtransparency, and reduce the problem of information asymmetry between investors and listed companies;on the other hand, the media has a scent as accounting scandals "watchdog" to bring the pressure of publicopinions on the listed companies, and play a role to improve the quality of accounting information of listedcompanies.This paper firstly reviewed and summarized the domestic and international literature about mediacoverage and the quality of accounting information, based on the theoretical of principal-agent theory,asymmetric information theory, reputation and Stakeholder theory, then proposed several hypothesises andestablished appropriate models to test them. With the financial restatements samples and their controlsamples in the time period2008to2010, the paper theoretically and empirically analyzed the impact ofmedia reports on the quality of accounting information of listed companies, and further researched howmedia reports of managers、government intervention and development level of media affect the governancerole of the media reports.The empirical results indicated that,(1)The more the number of media reports on the listed companies,the better the quality of accounting information is, and negative news is better for reducing financialrestatement behavior.(2) The negative news of management can suppress financial restatements behavior oflisted companies, at the same time,state-owned enterprises suffer from less supervision and regulation ofthe society.(3)Government intervention in the lower region, the smaller the possibility of governmentintervention in the economy, making the media to obtain and verify the listed company informationresistance decreases, the stronger the media role in the governance of listed companies.(4) the better thelevel of media development in the region, media reports and financial restatements negatively correlatedwith the smaller, this may be the stronger role of media supervision afterwards for opportunistic behaviorhas occurred, the media prompted released early financial listed companies Restated, the information needsto get real, comprehensive information.