Financial Reporting and Disclosure Practices in China

71 Pages Posted: 18 Jan 2019 Last revised: 3 May 2019

See all articles by Hai Lu

Hai Lu

University of Toronto - Rotman School of Management

Jee-Eun Shin

University of Toronto - Rotman School of Management

Mingyue Zhang

University of Toronto - Rotman School of Management

Date Written: April 30, 2019

Abstract

We provide survey-based evidence on financial reporting and disclosure practices in China. We use the items in prior studies surveying U.S. CFOs (Graham, Harvey, and Rajgopal, 2005; Dichev, Graham, Harvey, and Rajgopal, 2013) to benchmark our results against the findings from U.S. firms. We highlight some major differences in the perceptions on financial reporting and disclosure at Chinese firms. For example, Chinese firms do not consider analyst consensus forecasts as important earnings benchmarks, do not believe that voluntary disclosures reduce the cost of capital, and do not exhibit incentives to disclose bad news faster than good news. The follow-up questionnaires and on-site interviews corroborate our main findings and explore the potential explanations for the differences.

Suggested Citation

Lu, Hai and Shin, Jee-Eun and Zhang, Mingyue, Financial Reporting and Disclosure Practices in China (April 30, 2019). 2019 Canadian Academic Accounting Association (CAAA) Annual Conference. Available at SSRN: https://ssrn.com/abstract=3317893

Hai Lu (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Jee-Eun Shin

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Mingyue Zhang

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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