Research On Short Term Market Reaction And Industry Transfer Effect Of The Listed Companies Annual Report

Capital market is the main place to the allocation of resources, as the capital market and the increasing maturity of regulatory system to further improve, investors are increasingly demanding the quality of accounting information disclosure, the financial statements as to the stakeholders to transfer company operation status and development trend of information carrier, only in the guarantee of real cases, to ensure that investors make correct value judgment, to form an effective securities market. Financial report restatement is the published annual report of listed companies after the correct process, in the form of a temporary announcement errors to early traces the restatement, investors on the part of at less information produced adverse effect. With the increase in the frequency of financial report restatement in recent years, restatement announcement reaction research got the attention of relevant scholars at home and abroad, compared to earlier studies abroad, the securities market of our country starts relatively late, the market reaction on restatement announcement study also relatively small. Therefore, in the background, the characteristic of the securities system in China from the perspective of financial reports of listed companies restated the accounting information disclosure of listed companies of our country has a strong theoretical and practical significance.This article uses temporary announcement supplement or correct announcement of Shanghai a-share listed companies during 2010 and 2012 as research samples, applies event study method, single variable average test and multivariate linear regression method for the following questions:(1) How is the market reaction on listed companies’financial restatements announcement? Is there any different market reaction in the case of restatement announcement fine classification? (2) If financial restatement announcement has negative market reaction, the restatement companies’negative effect on industry performance behaves like transfer effect or competition effect; (3) what is the influence factors of financial restatement industry transfer effect?This thesis’ empirical results show that:(1) Issue of restatement announcement of listed companies causes the investors’ expecting decline in the value of the company, which directly expressing a fall in stock market, namely the financial restatements having negative market reaction. From the point of reaction degree, there are signs of early reaction in listed company’s daily abnormal returns before the event day, executives may get the message in advance and sell the stock. From the perspective of the detailed classification of restatement announcement, involves in correction notice accounting issues, core accounting restatement announcement causes more negative market reaction. Voluntarily initiated restatement announcement has obvious reaction phenomenon in advance, and its cumulative excess yields with the passage of time window is less than regulators. Regular annual report restatement announcement posted at the same time distracts investors, having less effect on the share price movements. But investors are not ignoring the release on trading day release or the last trading day of trading, showing that the significant negative market reaction. (2) Based on the listed company restatement announcement inside short time window, a rival firm’s share price in the same industry also immediately subjected to the influence of the negative effects, showing the transfer effect of financial restatement announcement in the same industry. In the same industry’s total assets are within 10% of the listed company, when a company restated behavior occurs, other companies will be doubted the same accounting behaviors, thus for the whole industry value judgment. (3) the strength of the industry transfer effect by excess accumulative total yields and financial restatement announcement restatement company is affected by core restatement, restatement company CAR, core content of the restatement exacerbated the negative effect of the transfer. If a rival firm’s business performance is good or a larger board can reduce the negative effect of restatement announcement.