In order to examine the effects of avoiding reputation damage by investor relations management under certain corporate governance structures and mechanisms, samples of 1120 listed companies are used to research the in...In order to examine the effects of avoiding reputation damage by investor relations management under certain corporate governance structures and mechanisms, samples of 1120 listed companies are used to research the influence on financial restatements by corporate governance. Then the moderating effects of investor relations management on financial restatements are analyzed. The result is that the more dispersed the equity, the higher the probability of financial restatements will be (This includes the government-controlled companies). Also the higher the proportion of independent directors and the higher the level of investor relations management, the lower the probability of financial restatements will be. Furthermore, as a moderating variable, investor relations management can eliminate the negative effects of corporate governance, enhance the effect of independent directors and reduce the probability of financial restatement.展开更多
This study uses restatements to reveal the poor quality of past accounting information reported within China's capital market.We show that up to a quarter of listed firms in China's Mainland explicitly admitte...This study uses restatements to reveal the poor quality of past accounting information reported within China's capital market.We show that up to a quarter of listed firms in China's Mainland explicitly admitted the poor quality of their financial information by restating their previous financial reports between 1999 and 2005.Many of these firms managed their earnings mainly via below-the-line items to avoid losses and promote survival,rather than to support refinancing goals.Such poor-quality financial reporting is more likely among firms that have weaker profitability and a shareholder base that is state-controlled,with diffused ownership and a relatively low proportion of shares held by institutional investors.Furthermore,we find the market to be relatively insensitive to such admissions.Investors' reactions capture only the earnings information of the current reported year,rather than also reflecting the concurrently revealed correction of past financial reporting.However,the equity market does not completely ignore the earnings information.Investors' reliance on earnings is merely low relative to the mature US market.These findings demonstrate that accounting credibility in China has low value;providing poor-quality financial information bears little cost because various market mechanisms fail to deter such behavior.Nevertheless,regulators' ongoing efforts to enhance the quality of financial information and disclosure among listed firms are still fruitful.The frequency of restatements decreased over our sample period,which reinforces the current regulatory prospects and strategies for further improving China's capital markets.展开更多
This study investigates the relationship between earnings management and financial statements frauds.We examine how earnings management practices;done in the two years before the fraud,impact the likelihood of fraud o...This study investigates the relationship between earnings management and financial statements frauds.We examine how earnings management practices;done in the two years before the fraud,impact the likelihood of fraud occurrence.Moreover,we introduce a new measure for the fraud intensity.Using a sample of 70 fraud and 70 no-fraud firms,we find that firms committing fraud of higher intensity have managed earnings in the two years before the fraud occurrence.This paper contributes to the literature about fraud antecedents because it is the first study measuring the relationship between earnings management and the intensity of the fraud,and it can be also useful for practitioners,because using the analysis of earnings management practices,analysts can foresee and prevent financial statements frauds.展开更多
基金The Key Project of the National Natural Science Foundation of China (No.70532001)Project of Humanities and Social Sciences Research Base of Ministry of Education (No.06JJD630008)
文摘In order to examine the effects of avoiding reputation damage by investor relations management under certain corporate governance structures and mechanisms, samples of 1120 listed companies are used to research the influence on financial restatements by corporate governance. Then the moderating effects of investor relations management on financial restatements are analyzed. The result is that the more dispersed the equity, the higher the probability of financial restatements will be (This includes the government-controlled companies). Also the higher the proportion of independent directors and the higher the level of investor relations management, the lower the probability of financial restatements will be. Furthermore, as a moderating variable, investor relations management can eliminate the negative effects of corporate governance, enhance the effect of independent directors and reduce the probability of financial restatement.
基金China's National Science Foundation(Project Number:70872107)for their financial support of this work
文摘This study uses restatements to reveal the poor quality of past accounting information reported within China's capital market.We show that up to a quarter of listed firms in China's Mainland explicitly admitted the poor quality of their financial information by restating their previous financial reports between 1999 and 2005.Many of these firms managed their earnings mainly via below-the-line items to avoid losses and promote survival,rather than to support refinancing goals.Such poor-quality financial reporting is more likely among firms that have weaker profitability and a shareholder base that is state-controlled,with diffused ownership and a relatively low proportion of shares held by institutional investors.Furthermore,we find the market to be relatively insensitive to such admissions.Investors' reactions capture only the earnings information of the current reported year,rather than also reflecting the concurrently revealed correction of past financial reporting.However,the equity market does not completely ignore the earnings information.Investors' reliance on earnings is merely low relative to the mature US market.These findings demonstrate that accounting credibility in China has low value;providing poor-quality financial information bears little cost because various market mechanisms fail to deter such behavior.Nevertheless,regulators' ongoing efforts to enhance the quality of financial information and disclosure among listed firms are still fruitful.The frequency of restatements decreased over our sample period,which reinforces the current regulatory prospects and strategies for further improving China's capital markets.
文摘This study investigates the relationship between earnings management and financial statements frauds.We examine how earnings management practices;done in the two years before the fraud,impact the likelihood of fraud occurrence.Moreover,we introduce a new measure for the fraud intensity.Using a sample of 70 fraud and 70 no-fraud firms,we find that firms committing fraud of higher intensity have managed earnings in the two years before the fraud occurrence.This paper contributes to the literature about fraud antecedents because it is the first study measuring the relationship between earnings management and the intensity of the fraud,and it can be also useful for practitioners,because using the analysis of earnings management practices,analysts can foresee and prevent financial statements frauds.
