Research On The Governance Effect Of Independent Audit In Performance Forecast Restatement

In the mature securities market,the independent auditing system of listed companies is one of the important external mechanisms of corporate governance.Auditors’ professional auditing activities can help to supervise the behavior of listed companies and the quality of financial reporting information,reduce the impact of information asymmetry and agency problems between investors and company insiders,and thus improve corporate governance and enhance corporate value.In recent years,the demand of market participants for information has been increasing,and the information disclosure system of Chinese capital market has been constantly developing and improving.Investors,government and other relevant departments have already felt that performance forecast should pay more attention to its credibility value in information disclosure.In Chinese capital market,there are always obvious differences among some listed companies’ performance early forecast and later adjustment.The content of performance forecast revision disclosure often differs greatly from the previous forecast.The phenomenon of performance restatement "face-changing" occurs repeatedly,which misleads investors to make decisions.Although performance forecasting itself does not need to be audited,independent auditing also plays a role in checking performance forecasting information in the process of practice.This paper takes performance forecast and performance forecast restatement announcement of Listed Companies in the reporting period from 2015 to 2017 as sample data,and the study finds that independent auditing is often one of the reasons for the restatement of the performance forecast.In the process of annual auditing,auditors often take more consideration on earnings from Management Statement carefully and adjust complex accounting treatment,so independent auditing has become an important impetus to restate performance forecasts.Among them,listed companies that have major restatements due to accounting treatment explicitly mentioned in the announcement that "audited by accounting firms" or confirmed that the reason for the modification and adjustment of performance forecast is that after the communication between the Finance Department and auditors,they believe that the contents of different professional judgments between management and auditors should be adjusted.Because performance forecasting contains important information that affects investors’ scientific decision-making,especially,many listed companies may be executed about delisting risk warning which their performance forecasting information is sensitive.The adjustment suggestions of independent auditing increase the company’s information cost,raise financing conditions,attract regulatory attention and increase investor complaints.Therefore,listed companies must communicate with annual auditors on related matters.Independent auditing by auditors is risk-oriented and plays a positive role in the re-reporting of performance forecasts,which promotes listed companies to manage enterprises according to law,improve compliance management and add value.Tiancheng Holdings has attracted the attention of the CSRC and investors because of the repetition of performance forecast.It provides an opportunity for the CSRC to investigate and deal with the inside trading of the company and becomes the first listed company to be filed because of the difference of performance forecast repetition.Taking Tiancheng Holdings as an example,this paper makes a detailed analysis of the matters,reasons and roles played by external auditing in the filing investigation of the SFC and the repetition of the performance forecast in 2017,and puts forward some conclusions and suggestions on the role of independent auditing in the governance of the performance forecast repetition.