Research On The Influence Of Annual Report Inquiry Letter On Enterprise Cash Holding Level

In December 2020,the central economic work conference pointed out that we should make a good start to the 14 th five year plan with high-quality development,and the securities supervision of the capital market is of great significance to guide the sustained and high-quality development of the market.At the same time,the State Council issued the suggestions on promoting the high-quality development of listed companies,which proposed to improve the quality of listed companies as an important goal of securities supervision in the capital market from the top-level design level,so as to further promote the efficiency and effect of front-line supervision of stock exchanges.As an important way of front-line supervision of Shanghai and Shenzhen Stock Exchange,inquiry letter has attracted extensive attention of scholars.Studies have shown that,on the one hand,the supervision of annual inquiry letter can play an information effect and improve the information disclosure quality of listed companies’ annual financial reports;On the other hand,it can give play to the effect of regulatory governance and improve the level of corporate governance.However,there is little literature to explore its impact on enterprise micro financial decision-making.Cash is the blood of enterprise survival and development.The level of cash holding is directly related to the company’s asset allocation and risk management,affects the company’s investment efficiency and operating performance,and then determines the value and development quality of listed companies.Under the guidance of strengthening the supervision during and after the event,the annual report inquiry letter has gradually become the first line of defense for the quality of listed companies,providing an opportunity to study the financial decision-making of micro enterprises.Based on this,this paper explores the effectiveness of the supervision of the annual inquiry letter from the perspective of cash holding,an important financial decision for the operation and development of enterprises.Therefore,taking 2015-2019 as the sample period,this paper selects A-share listed companies in Shanghai and Shenzhen as the sample to empirically test the impact of annual report inquiry letter on enterprise cash holding level.The results show that the annual report inquiry letter has played a positive role in supervision and governance.Under the pressure of annual report inquiry,the cash holding level of enterprises has decreased significantly,and the research conclusion is still valid after the robustness test.After that,this paper further distinguishes the text characteristics of the annual report inquiry letter,and studies the impact of different regulatory inquiry efforts on the cash holding level of enterprises.The results show that when the inquiry letter of the annual report involves cash key matters such as "monetary capital",the negative relationship between the inquiry letter of the annual report and the cash holding level of the enterprise is more significant.In addition,the greater the inquiry pressure,that is,the more frequent the annual cumulative number of letters,the more letters and replies,the stronger the inhibitory effect of the annual inquiry letter on the cash holding level of enterprises.Finally,this paper makes a further study on the nature of property rights,internal control quality and agency cost of listed companies.From the motivation and objective conditions of cash holding level,the inhibitory effect is more significant in non-state-owned enterprises,enterprises with poor internal governance and large agency conflict.The research conclusion of this paper shows that regulatory inquiry effectively reduces the cash holding level of enterprises under agency motivation,effectively protects the rights and interests of investors,and has become an important mechanism guarantee for the development quality of listed companies.This paper studies and enriches the relevant literature on the supervision of annual report inquiry letter and enterprise micro financial decision-making,and finally comes to policy suggestions on increasing the inquiry strength of annual report inquiry letter,improving the regulatory deterrence of stock exchange,establishing and perfecting internal governance mechanism and improving the level of corporate governance,in order to provide help for regulators to further improve the annual report inquiry letter mechanism.