Financial Restatement and the Information Content of Earnings

摘要

This paper takes the 452 listed firms as samples, which recorded financial restatement during 2008 to 2009, and inspects the quarter information content of earnings before and after the disclosure of financial restatement by using the one-period model of Wilson. Investigation indicates that the quarter information content of earnings declines following the disclosure of financial restatement In particular, the ERC of quarter earnings before and after the disclosure exhibits a U-shaped pattern. However, the loss of information content following the disclosure is only temporary. The information content returns to prior level from the second to forth quarter after the disclosure. In addition, investors make response to the temporary disclosure and the information content of earnings declines in succeeding four quarters following the disclosure of core earning errors correction.