Research On The Characteristics Of Annual Report Inquiry Letter And Market Response

With the gradual implementation of the concept of "deregulation and strengthening supervision",China began to implement the Express Information Disclosure in 2013.The system allows the company to register and disclose the announcement within the designated scope through the information disclosure system,and take the responsibility for the announcement.At the same time,the supervision mode of the exchange has also changed from "Prior supervision" to "Post supervision".As the main means of Post supervision,the inquiry letter system of annual report has been widely concerned by the practical and academic circles.At present,most of the research on the annual report inquiry letter is empirical research,lacking of a case study on a company in many aspects,analyzing the contents of the annual report inquiry letter,the reflected financial risks and the quality of the reply letter,and on this basis,the characteristics of the annual report inquiry are rarely related to the market reaction.The core issue of this paper : how to judge the market reaction by the characteristics of annual report inquiry letter? Including four aspects: what are the characteristics of the inquiry letter of Lonsen Zhejiang? What are the characteristics of the reply to the annual report inquiry letter? What kind of market reaction has it produced? What is the relationship between the characteristics of annual report inquiry letter and market reaction?The research idea of this paper: the first part is mainly to summarize the research background and significance of the topic of inquiry letter characteristics and market reaction issued by stock exchange,the second part is to review the relevant academic literature of inquiry letter,which is the basis for elaborating the new angle of this study.The third part is to explore the content,financial risk and the situation of Reply of the annual report inquiry letter through theoretical analysis and case analysis.The characteristics of the inquiry letter and the reply letter are corresponding to the market reaction,and the relationship between them is obtained.The fourth part is through the analysis of the above parts to come to the conclusion of the study,and put forward relevant suggestions to enterprises,investors and stock exchanges.The research conclusion of this paper: the contents of the annual report inquiry letter include the authenticity of financial data,the impairment of assets,the ability of continuous operation,the fairness of related transactions,etc.The annual report inquiry letter reflects less risk of financial fraud,and the enterprises with high response quality usually have obvious negative market reaction due to receiving the annual report inquiry letter,but the market will return to rationality after a period of time,which has little longterm impact on the enterprises.High quality reply to the annual report inquiry letter has a certain effect on stabilizing the stock price and reducing the negative market reaction caused by the annual report inquiry letter.Enterprises with many types of problems will not have obvious market reaction when they receive the annual report inquiry letter,and the information(such as the correction of annual performance forecast)that directly affects the performance issued by enterprises is more likely to attract investors' attention than the indirect information such as the annual report inquiry letter.