Research On The Relation Between The Board Of Directors Governance Of Listed Companies And Accounting Fraud

Enron was bankrupted in 2001, its management was first questioned including the board of directors, supervisors and senior management personnel which were accused of dereliction of duty, providing false financial information, pursuing personal profit and misleading investors. Then the exposure and disclosure of accounting frauds of WorldCom, Xerox and other world-class multinational companies caused people's attention to the corporate governance, especially the Board of Directors Governance, an important part of the corporate governance which relates the effective operation of internal control and the quality of the company's financial position. Accounting fraud is lawbreaking activities that the management authorities or the parties concerned adjust accounting information through illegal means and distort the financial situation of enterprises authenticity and comprehensiveness in order to seek some kind of economic interests or malfeasance. Domestic and foreign research results indicated that the Board of Directors Governance and accounting fraud has some relevance.To research the relation between the Board of Directors Governance and accounting fraud, we select the fraud companies as research samples, and then select non-fraud companies as comparison samples, which own the closest asset size with the fraud companies in the same industry and in the same year according to the ratio of 1:1 based on the 2007-2009 Annual Report of Listed Companies. We analysis the characteristics the Board of Directors Governance of the fraud firms and non-fraud firms comparatively, and researchThe Logistic Regression Test in the study shows that the Board of Directors Governance and accounting fraud has some relevance. There is a significant positive correlation between the numbers of board meetings and accounting fraud, meanwhile, increasing the board shares has a significant inhibitory effect on accounting fraud. We also find that the larger is the company's assets, the smaller likelihood of financial fraud is listed company. But we don't find the board director holding a CEO, the size of the Board, the proportion of independent directors in the board of the listed companies has significant correlation with accounting fraud.The research of the relevance between the Board of Directors Governance and accounting fraud provides instructions for the recognition of accounting fraud. CPA and the relevant departments should strengthen the supervision of the listed companies with frequent board meetings or low board shares. The listed companies should strengthen the Board of Directors Governance by improving the efficiency of the board and increasing the board shares order to improve the quality of financial information. As the decision-making and supervision department, strengthening the Board of Directors Governance could improve the board's governance, decision-making, regulatory and operational efficiency. It not only plays an important role in the prevention of accounting fraud but also promotes the overall healthy development of the company.