Study On The Relationship Between The Board Of Director Characteristics And Financial Fraud Of Listed Company

Financial fraud is a widely headache problem which has a long history, from Enron, Worldcom to ZhengBaiWen and Yin Guang Sha, whether the foreign or local in China, th e financial frauds of listed companies just like blockbusters in the stock market, one by o ne, overwhelming and unprepared. This also makes the financial fraud problem to be a ho t issue on the agenda. The financial fraud of listed companies is a problem which still fre sh even after long and need to be solved eagerly.In Chinese Securities Market, how about the financial fraud issue of listed companies. Predecessors and scholars did a lot further researches and discussions on financial fraud i ssue from many aspects. This paper starts with studying the characteristics of the board, a ims at finding that whether there exists significant differences on the 6 characteristics of b oard between the financial fraud and the non-fraud listed companies. In this paper characte ristics of the board contain 6 aspects, they are board size, independent directors ration, du al director, board meeting times, audit committee, board's shareholding ratio. First, on the basis of the theory of financial fraud and characteristics of board, the study put forward si x hypotheses. Second, the study collects 50 financial fraud firms and non-fraud firms resp ectively, and according to fraud annual, two kinds of firms divided into 90 samples, separ ately. In the part of empirical studies, I practies the Paried-Samples T test and Logistic re gression testing between the 90 fraud samples and 90 non-fraud samples in SPSS. The res ult of T test indicates there are significance differences in the variables of dual directors a nd board shareholding ratio; but the variables of board size,independent direetors ratio,b oard meeting times and audit committee are not show significances between fraud firms a nd no-fraud firms. The result of logistic regression shows that there exists remarkable corr elations between dual directors,board shareholding ratio and financial fraud on the signific ance level of 5%. At the end of the paper, I sum up the whole dissertation on the basis of pervious chapters and give suggestions for preventing financial fraud and improving the characteristics of board in China listed companies.