Determinants of Financial Restatements in the Listed Companies in China

This paper firstly introduces the latest Accounting Standards about financial restatement, and the current situation of financial restatement in listed company in China, then analyzes the determinants of financial restatements from company characters, ownership structure, internal governance structure and external governance, the results are as follows: the better performance of listed companies, the lower probability of financial restatement; ownership concentration is negative correlated with the probability of financial restatements; the number of independent directors is significantly positive correlated with the accounting information quality; the establishment of audit committee can reduce financial restatement; the supervision of the securities regulatory authorities can effectively reduce the financial restatement; audit by larger accounting firms can reduce financial restatement. And according to the above results, this paper gives the following suggestions for the improvement of listed company financial restatement: improve the governance structure; strengthen market supervision; perfect the relevant accounting standards, laws and regulations.