| Since the the formation of China’s securities market,as an important part of the securities market,the listed companies,there have been repeatedly exposed to accounting fraud scandal,from the ZhengBaiwen event,Yinguangxia fraud to today’s xintai electric,Wan Fu Sheng Ke,have brought huge impact to the stock market,this has also greatly damaged the interests of minority shareholders.As a powerful tool to regulate the market,financial penalty is not only a punishment to the listed companies and related personnel who violate the principles,but also a warning to other market participants.Looking at the current securities regulatory mechanism in China,an administrative penalty system has been formed,represented by the CSRC.Through the improvement of the regulatory system,the listed companies are supervised in an independent capacity,giving full play to their role as "public gatekeepers".Based on the premise of being punished for financial irregularities,what is the effect of being punished? Will the management of the listed company be more diligent in performing their duties after being punished? How will the market react? How will the operating efficiency change? Based on the above background,this paper conducts a research on DZH limited which is punished for its financial violation,comprehensively analyzes the process and reasons of its punishment,and analyzes the situation before and after being punished,so as to verify the specific effect of financial violation punishment of listed companies.In terms of content,this paper firstly sorts out and summarizes the domestic and foreign literature on securities regulatory system,motivation of illegal behaviors of listed companies and penalty effect of financial irregularities.Secondly,combining with the research ideas of this paper,this paper expounds the theory of reputation,the theory of government regulation,the theory of investor protection and the theory of market failure,which proves the necessity of the regulatory authorities represented by the CSRC to punish financial irregularities.At the same time,the paper defines the key concepts as the connotation and extension of the paper.Thirdly,by selecting the financial violation penalties of listed companies from 2010 to 2018 as a sample,we can make descriptive statistics on the financial violations and punishments of Listed Companies in China,so as to understand the current financial violation penalties of listed companies in China.Fourth,we can select the DZH companies punished for financial violations as a case for analysis,On the basis of a comprehensive understanding of the process and means of its violations,this paper uses relevant data and materials to conduct a detailed analysis of the situation before and after the violation punishment,mainly from the following several aspects:(1)using the event study method,the Cumulative Abnormal Return(CAR)within the [-30,30] window period before and after the investigation announcement date and the violation punishment announcement date is calculated According to the fluctuation range,the market reaction caused by financial violation punishment is determined.(2)analyze the changes in the management of the company and the performance of relevant personnel before and after the punishment;(3)analyze the change of management cost after punishment;(4)analyze the specific changes of the financial information caused by the restatement of the financial statements after the punishment of financial violations and the fluctuation of the company’s operating efficiency after the punishment.Through the above analysis,comprehensively study the effect of the punishment of financial violations,and on the one hand,it can remind investors to pay attention to the changes of enterprises after the punishment and invest prudently.On the other hand,it can provide reference for further improving the supervision level of China’s securities market.The results show that :(1)the market reaction after the penalty of financial violation is significantly negative,especially on the day of announcement date,which has a strong negative reaction;(2)the corporate governance level has been improved after the punishment,but the performance of independent directors is still insufficient;(3)the management cost of listed companies increases after the punishment.(4)the company’s operating profit declined in the current year,but the authenticity of financial information increased.Finally,from the point of view of listed companies and investors,in the face of the effect of financial penalties of listed companies,this paper puts forward relevant suggestions to help listed companies and investors better avoid risks. |
