Research On Motivation And Consequences Of Financial Restatement Of Listed Company

The establishment of China's financial restatement system was originally intended to improve the quality of accounting information of listed companies,reduce the phenomenon of information asymmetry between investors and the investee in the capital market and increase market transparency.However,more and more listed companies use financial restatements as a shield to cover up their losses,and recklessly correct accounting errors.These phenomena have caused the financial restatement system to deviate from its original intention.At the same time,with the frequent restatement of financial statements by listed companies in China,the scope of the restatements was extensive and the amount was significant,causing huge property losses to investors,also causing extremely adverse negative effects on the capital market.Therefore,combined with the case study about the present situation of our country listed company financial restatement,to understand the basic reason of financial restatement and its economic consequences,standardize financial restatement system effectively,strengthen the supervision of relevant institution of China,and then improve the system of our country listed company financial restatements are necessary.This paper adopts case analysis method to summarizes a large number of domestic and foreign literatures on financial restatement.Combining with the case of financial restatements of Shandong Molong,this paper research the changes in four aspects,business situation,financial situation,internal controls,and external market response,of Shandong Molong before and after the restatements and analyses two financial restatement of Shandong Molong in details,with a view to being able to dig deeper into the true motives for its financial restatements and the conditions for its implementation.Through the problems reflected in this case,we seek to suggestions and effective measures that can effectively supervise and standardize the financial statements,improve the quality of corporate financial statements,reduce the financial restatement of listed companies,to achieve the goal of reducing the use of financial restatements by listed companies to obtain illegal profits.