Research On The Regulatory Effectiveness Of Annual Report Inquiry Letters On Listed Companies

In recent years,the problems faced by the development of the capital market have increased year by year,such as the imperfect governance structure of listed companies,the inadequacy of institutional supervision and functional supervision,and the lack of a sound market supervision system.In the process of market regulatory transformation,the stock exchange is the main force in the supervision of listed companies in China and plays an important role in preventing risks.In order to improve the efficiency of supervision and the quality of information disclosure of listed companies,the Shanghai and Shenzhen stock exchanges have launched an inquiry letter system as a first-line supervision means.Exchange’s inquiry letters mainly include periodic report inquiry letters,M & A and reorganization inquiry letters,supervision letters,and follow-up letters.Among them,the most concerned are the annual report inquiry letters in the periodic report inquiry letters.However,this method of inquiry and supervision does not take punitive measures.Therefore,can this non-punitive supervision method correct the illegal activities of listed companies,reduce the disorder of information disclosure,and prevent financial risks? Does the market recognize its regulatory role? These issues are yet to be verified.Therefore,this article selects a listed company W that has received multiple inquiry letters as a case,adopts the event research method and case analysis method to study the supervision effect of the annual report inquiry letter from the perspectives of external supervision and internal influence.First of all,the company’s operating status,governance and financial status in recent years were analyzed,and then the number and content of the questions in the inquiry letter of W Company’s annual report were counted,and the questions in the inquiry letter were classified.Key aspects of company attention and regulation.Then tested the market response caused by the annual report inquiry letter incident to the company,verified the information content and regulatory effectiveness of the exchange annual report inquiry letter.Finally,the impact of the Exchange’s annual report inquiry letter on W Company’s internal management was studied from three different perspectives: the quality of information disclosure,the internal control system,and the level of earnings management.The study found that stock exchanges are mainly concerned with issues such as operating risks,internal control deficiencies,and accounting treatment of listed companies.W Company received the annual report inquiry letter event and responded to the inquiry letter event,which will cause significant market response and have a certain regulatory effect on the company.Secondly,this method of supervision through inquiries can urge listed companies to correct and solve problems that are not serious and prevent related risks or problems from further worsening.Through the calculation and inspection of relevant indicators,it is proved that the annual report inquiry letter has improved the authenticity,completeness and accuracy of the company’s information disclosure for a period of time;it has played a role in urging and rectifying major internal control defects of the company;The behavior of earnings management will also have a restraining effect,reducing its level of earnings management.Finally,through the research in this article,it can provide reference for other listed companies that have received the inquiry letter to effectively respond to the inquiry letter and avoid receiving the inquiry letter again.At the same time,it also provides some suggestions for the operation of the exchange supervision mechanism,which is better.The regulatory inquiry of the exchanges has enhanced the regulatory role of the inquiry letter in the capital market.