Positive Study On The Financial Fraud Of Top Management Team Of Chinese Listed Companies

In recent years, China capital market has developed fleetly in the background of high speed economic growth and continuous capital inflow. However, the ubiquity of financial fraud of listed companies have harmed the economic benefit of stockholders, creditors, and other correlative people, impacted the unfledged capital market, and further influenced on the healthy development of itself.As a special group, the top management team of listed companies is the"leading actors"of financial fraud who always control the accounting. They have information rights. The information reported includes their subjective will, and has effect on the public and other specific information users. Without adequate and effective constraints on the rights of top management team, once beyond certain finitude, financial fraud will take place easily.It is reported that 680 senior managers are punished by China Securities Regulatory Commission with forms of warning, critic and penalty between 2002 and 2006. Therefore, it is necessary to study the problem of financial fraud in top management team. However, we can't use foreign method due to the particularity. Thus, it is significant to study financial fraud in top management team based on the status quo of our country.This paper firstly introduces contribution of domestic and foreign scholars to literatures on financial fraud in top management team, including the objective and subjective factors which influence financial fraud. Then, this paper analyzes the system of the top management team of listed companies in our country, including the aspect of selection, surveillance, evaluation and prompting. Furthermore, we incorporate the crime psychology to study the objective and subjective influence factors of financial fraud in top management team. Based on the above analysis, we build the binary logistic regression model. Positive conclusions are as follows: it is likely to fraud for the younger top management teams or younger senior managers; it is also likely to fraud for the top management team whose companies are in the eastern area of China; consummate interior control and independent directors could reduce the fraudulent probability; supervisors have not exert their function.Finally, this paper summarize the study and put forward with constructive suggestions for the governance of financial fraud in top management team from aspects of law, corporate governance structure, and the system of top management team, internal and external supervision. And point out the inherent limitation of this paper and the advice that how to improve them.