Research On Financial Restatement Based The Auditor Reputation Perspective

The occurrence of financial restatements is an important manifestation of listed companies7imperfect information disclosure, because the financial report has error, illegal or some misleading information. The public pay attention to financial restatement because it represents the information that disclosure of public company is not all-around and has some drawbacks. Especially when the financial restatement involved in the retrospective restatement method, the profit of the company needs to be changed correspondingly. The users of the financial report may be misled and have done some mistake. This is serious. The existing study on financial restatements mainly concentrated in the internal corporate governance perspective. They have researched the direct incentives, market reactions and economic consequences of financial restatements from the company’s own perspective and there is little literature to explore the same question from the accounting firm perspective. As for the auditor reputation perspective, it can be said to be unprecedented.This paper based on the auditor reputation and financial restatement theory firstly and proposed the hypothesis that the higher the reputation of auditors, the smaller possibility of occurrence of financial restatements. Quantitative indicators of the scoring rate as auditor reputation in the integrity of the AICPA hundred firms file. In addition. I also selected the size of the board, the quantity of independent directors, if the chairman is also the CEO, the Board held frequency and asset-liability ratio as a control variable. Then collect the2008-2011annual financial reports of listed companies in the financial restatement. Establish logistic model according to the related data, conducting regression analysis. The empirical results show that, a good reputation auditor has certain inhibition on the listed company’s financial restatement.This article view financial restatement as a economic consequences of the auditor’s reputation and analyze the reason of financial restatements from an external point of view. Such, a new research perspective appeared and also provided a new regulatory idea. In addition, the article also demonstrated the reasonableness of the AICPA scoring rate as the reputation of the auditor, thus also provides a new path for the future related issues.