Research On Characteristics Of Management Influencing On Financial Restatement

The financial restatement is an accounting method for tracing back to adjust and re-publishing tothe profit and loss of a company in the past accounting period. Since the last mid-90, regulatoryauditor and academics have paid more attention to financial restatements. Finance restatements arepublicly announced in the form of holding announcement such as complementarities and correctionbulletins that can make more or supplement to the annual financial statement, half a year or monthlyreport. It usually means that there are possible error or neglect in the originally annals, and even badly,it sometimes becomes a good choice of managers to manipulate profits which will constitute agraveness influence to the company’s history profit and loss conditions, and change accomplishmenttrend, then influence investor decision, and cause the violent motion of stock price. Therefore, weintend to view restatement as the low quality expression of accounting information. This paper makesa study and analyzes on financial restatements and the influence corporate governance give it. Theelements of corporate governance concerned include ownership structure, executive pay，boardcharacteristics，external audit and supervision of institutional investors. The objective of this paper isto set up a better corporate governance model which can improve the disclosure quality of financialaccounting information.In this paper, we study the impact of background characteristics of executive management anddifferences in background characteristics on the company’s financial restatement, following Shanghaiand Shenzhen A-share listed companies in manufactory industry between2007and2011data as asample of empirical tests. The result shows: there is significantly relationship between executive’smanagement of gender, age, executive’s management size, average degree and the company’sfinancial restatement, Chairman of the board personal background characteristics affects thecompany’s financial restatement primarily from management of gender and age. The significance ofthis study is that the study’s executive accounting policies, we must take into account the relevantpersonal background characteristics of executive’s management. At the same time, this paper hassome instructive to better understand the accounting practices and optimization management team.