Focusing on shuangkang fraud event, the paper analyzed the spillover effect of fraud，and used the same industry and the same region listed companies as the experimental samples. It has the following findings: first, the price of the listed companies in the same industry would decline significantly after fraud of the company, while this declination was not significant in the same province; second, the low earning quality of listed companies could explain the decline in the stock prices; third, group test indicated that a company's internal governance could affect the spillover effect. Specifically, state－owned enterprises and higher ownership concentration were greatly influenced by the spillover effect of fraud．Therefore, it could be inferred that investors may make decision according to accounting information in the face of negative market news. The paper suggested that listed companies should improve the quality of their earning quality to reduce the volatility of negative information.