The Empirical Research of the Correlation between the Abnormal Accruals and the Quality of the Listed Corporate Financial Report

Abstract: The disclosure of drawing up false accounts, peculating funds , increasing the profits ,unclerance of property rights, the inside trades, which erupt one after another like thunders in our securities market, and the focus of problem is the financial report of the listed company. The finance report of listed company is a kind of quasi-public good, its quality is the foundation which supports the whole stock market to develop healthily. From the view of reporting mechanism of the listed company’s financial report, managers need to provide financial report to clients to relieve the entrusted responsibility. But the securities market of the our country is a newly arisen market, which has its unique characteristics,in addition to having the commonness of all newly arisen market: the government oriented supervising mode, the group of the listed company consists mainly of state-owned enterprises; All of these cited above make our financial report of the listed company different from other country’s.The quality of financial reports of our country’s listed company is lower in currently, making the research of finding out which factors are highly correlated with the financial reports quality of the listed company , how to improve the quality of the listed company’s financial reports , and what’s the fundamental reason of the low quality financial reports ,have theory and application meaning.After using empirical method, this paper has checked up the correlation between abnormal accruals and the quality of the listed company’s financial report ,through analysis of the two variables, the result of testing manifests that financial reports of our country’s listed company and the abnormal accruals is positive correlated.This paper proposes that one way to improve the quality of the listed company’s financial reports is to control the abnormal accruals in the listed company’s financial reports and to monitor the managers’manipulation on the listed company’s financial reports…
Key words: Quality of the Listed Company’s Financial Report ; Abnormal Accruals; Total Accruals

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