Research On Financial Restatement Of Listed Companies Based On The Perspective Of Annual Report Tone Manipulation

With the rapid development of natural language processing technology in my country,the research on text information has gradually deepened,and a large number of scholars have begun to mine the text information in the annual reports of listed companies,such as using the tone of the annual report to improve the accuracy of financial crisis prediction models.The tone of the annual report text is manipulated to match the internal earnings management behavior,and the tone index of the annual report is added to the financial forecasting model to obtain better forecasting effects.In previous researches on the financial restatement of listed companies,most scholars analyzed its motivation and impact based on digital financial indicators,only analyzed financial restatement behavior from the perspective of digital information,and combined financial restatement with textual information.less.The types of financial restatements can be divided into active financial restatements and passive financial restatements.Compared with active financial restatements,passive financial restatements often occur due to serious problems in the annual report,such as the annual report net profit before and after the restatement,etc.The key financial indicators in the financial statements will also undergo major changes,which will harm the interests of small and medium investors.In order to reduce the suspicion of users of the annual report information on the annual report before the financial restatement,the listed company has a strong motivation to manipulate the tone of the annual report to cover up the financial situation.Report whitewashing.Based on the theoretical analysis of the existing relevant research,this thesis proposes hypotheses and conducts empirical testing with a large sample.Based on the empirical testing conclusions,this thesis selects Jiadian Electric Co.,Ltd.,which has undergone many passive financial restatements among listed companies,as the case study object.,based on Jiadian Electric’s annual report tone manipulation perspective to conduct an in-depth study of its financial restatement.In the exploration of the relationship between annual report tone manipulation and passive financial restatement,this thesis firstly conducts a theoretical analysis on the mechanism of action between the two.When a listed company fulfills its performance commitments or covers up its performance losses,the management has a strong incentive to manipulate the tone of the annual report to cooperate with its earnings management and other financial frauds.But for analysts and other "information interpreters" with industry expertise,they will not only analyze the digital information of the financial statements,but also combine the textual information of the annual report to judge the company’s true operating conditions.When the tone of the annual report is abnormal,analysts will remain professionally cautious and doubt the information disclosed in the annual report.With the accumulation of financial problems in the annual reports of listed companies year by year,external annual report information interpreters will gradually deepen their suspicions about the annual reports of listed companies,resulting in the problems in the annual reports can no longer be concealed.A restatement of the annual report issues involved.Secondly,this thesis uses Python to extract the annual report text information in the annual report file,and uses excess tone to measure the degree of tone manipulation.Taking A-share listed companies from 2013 to 2019 as the research object,the passive financial restatement and the sample without financial restatement are carried out.Comparative analysis.Finally,the study found that,keeping other conditions unchanged,the degree of tone manipulation in the annual report of listed companies significantly increased the probability of passive financial restatement.big.In the case study,this thesis selects Jiadian Electric,which has experienced many passive financial restatements as the case study object,and explores the problem of passive financial restatement from the perspective of tone manipulation in the annual report of a single case company.Firstly,it analyzes the tone manipulation and passive financial restatement of the annual reports of all listed companies.It is found that there is a significant difference in the excessive tone of annual reports with passive financial restatements and those without financial restatements.Secondly,an in-depth study of Jiadian Electric’s 2013-2019 annual report was conducted,and it was found that Jiadian Electric’s 2013-2015 annual report not only had a large degree of earnings management behavior,but the tone of its annual report was also abnormal compared with other years.Further combined with the financial restatement of Jiadian Electric’s annual report,it is found that there is a significant difference in the excessive tone of the annual report text with passive financial restatement and the annual report without financial restatement.Consequences of earnings management practices.Furthermore,this thesis uses the change range of net profit before and after passive financial restatement as an index to measure the degree of financial restatement,and the absolute value of annual report excess tone as an index to measure the degree of annual report tone manipulation,to further explore the relationship between the two.The results show that the greater the degree of tone manipulation in the annual report,the greater the possibility of passive financial restatement and the stronger the degree of financial restatement.Finally,based on the perspective of tone manipulation in Jiadian Electric’s annual report,the motivation and impact of its financial restatement are analyzed,and relevant suggestions are put forward from the perspectives of investors,management and regulatory authorities.