Research on the Robustness of Financial Statements of Listed Companies based on Securities Law_Vol. 1 No. 2 (JEL 2024)_Journal of Economics and Law (ISSN: 3005-5768)

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Research on the Robustness of Financial Statements of Listed Companies based on Securities Law

DOI: https://doi.org/10.62517/jel.202414240

Author(s)

Shengnan Zhou1, Shuaipeng Li2

Affiliation(s)

1Administration of Pilot Free Trade Zone, Hefei High-tech Zone Management Committee, Hefei, Anhui, China 2Anhui Vocational College of Urban Management, Hefei, Anhui, China

Abstract

Based on A sample of Chinese A-share listed companies from 2008 to 2018, this study predicts that the robustness of financial reporting of listed companies will increase significantly since 1998 due to the promulgations of accounting reform and securities law. There is a lack of consistent definition of robustness in the available data. Therefore, based on Bayesian network rule, this paper uses multiple measures, including the change of cumulative accruals, the timeliness difference of earnings response to good and bad news, and the degree of continuous downward bias of net worth relative to market value. The improvement of the comparability and reliability of A-share statements is conducive to promoting the integration of A-share and B-share and deepening the internationalization of China's capital market in the future.

Keywords

Securities Law; Accounting Reform; Conservatism; Accruals; Earnings/Compensation Relationship; Net Worth/Market Value Ratio

References

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