There are some Chinese firms whose stocks has been listed on Korean stock market. It not only provides the investor new alternative opportunities to be able to invest foreign companies but also contributes the globalization of capital market in Korea. But ex post supervision on those firms is required to keep up the better investment environment. Recently, 2 Chinese firms were delisted due to the disclaimer of audit opinion or the spontaneous abandonment. It can be the actualization of the concern on the reliability of accounting information of chinese firms. This paper has taken the empirical test of the relationship between the stock returns and the net income or cash flow from operations. According to the accounting principles, net income is measured using the accruals which mitigates timing and matching problems inherent in cash flows so that earnings more closely reflects firm performance. As a results, Chinese firms` stock returns is more closely related to cash flows and there is no empirical evidence for the role of accruals. On the contrary, accruals are highly utilized for domestic Korean firms. This results raise the seriousness of management for Chinese firms`s accounting information in Korea since the measurement of firm performance is not fully exercised when predicting the real value of Chinese firms. Therefore, institutional strategies should be provided to improve the investment condition reducing the ‘China-discount’ on Chinese firms.