The Utility Analysis Of Media Supervising Financial Fraud

For more than a decade,financial fraud cases have never interrupted,which impels the further exploration of corporate supervision and governance mechanism.At early stage,financial fraud problem Tend to focus on the composition of board,the government administrative supervision and civil litigation.In recent years,both An Ran and Shi Tong became impoverished under the expulsion of financial crisis,since the external corporate governance has been paid more attention.In recent years,many governance problems existing in listed companies are firstly disclosed by media and then arouse the public attention.such as Yin Guang Sha financial fraud,San Lu melamine milk,and illegally related party transactions of Wu Liang Ye.However,the domestic listed company financial frauds emerge in an endless stream,while media exposes the scandal of listed companies.This leads to a problem,media behavior in the company of the supervision system can be in what role? Have what effect? Therefore,the research of the media supervision and governance of financial fraud in China which is in the transition economy market,has important sense to make full use of media supervision and management,protect the interests of investors,improve corporate governance.Taking QSGD as the research object and based on previous study and theoretical analysis,this paper firstly introduces the mechanism that how the media supervises company financial fraud and the factors affecting the media supervision.Secondly,the case analysis part explores the motivations of QSGD fraud and excavates the doubts arousing media attention.Then it lists and introduces the whole process that the media reports;picks out the insufficient of both internal and external environment.Then make use of event study to further measure the baneful influence result in QSGD as well as the stock price,to explore whether the negative news had lead to negative reaction to QSGD or not in market ? What is the difference comparing to the same industry ?At last,the results prove that,the decision-making of investors can be really affected by the negative reports.At the time,negative reports can lead corporation to negative abnormal stock returns,related to the companies from the same industry,to be more specific,the negative abnormal stock returns of the company caused by the negative reports is more remarkable.The result authenticate the existence of media supervision.By analyzing the changes of QSGD earnings management from 2013 to 2015,we can than since the media exposure of financial fraud,Discretionary accrual items of QSGD have been declining,which may be due to the media and the SFC to make QSGD reduce the use of easily identified discretionary accruals project.the real earnings management degree has decreased significantly after the exposure of media,but increasing sharply in 2015,which might be due to the public pressure and the Commission survey,managers do improve governance in 2014,in 2015,the pressure of public opinion and the SFC slightly lax,the fraud nature of QSGD was hard to change,the company adjusted earnings management strategies to avoid exposure.Further studies point out although the fraud can be correctly market-set prices,due to the failure of other external governance mechanism,corporate governance of QSGD show no noticeable improvement.Through the research of media supervising QSGD financial fraud,and puts forward to suggestions to give full play to the role of media supervision and management,helps to draw attention of scholars and executives to media which is one of the external supervision mechanism,combining internal governance with external governance,strengthening the effect of supervision and governance,protect the interests of investors,optimize the resource distribution in the securities market.