The Effect Of Financial Administrator’s Professional Ability On Financial Restatement

In recent years, the phenomenon of financial restatement is increasingly serious in both domestic and international capital markets, which not only reduces the quality of accounting information, but also violates the information users’rights. So it has been cause for great concern by various circles of society. Given the seriousness of the financial restatement, an increasing number of scholars join the discussion. Most of them focus on the motivation (especially combing with the wave of earnings management), economic consequences and the corporate governance structure ignoring people’s activity. It’s no doubt that the professional ability of people who are in charge of companies’finance has a profound effect on financial restatement.Based on Upper Echelon Theory, this paper selects financial administrators as the object of study, who can affect the generation of accounting information directly and crucially. We use descriptive statistics, correlation analysis, and Logit regression model to test the relationship between the administrator’s professional ability(level of education,work experience)and financial restatement. What’more, considering the tightness between the repeat information and accounting professional knowledge, some restatements which may have little significant relationship with accounting are rejected, to conduct regression analysis secondly. To make further confirmation, then pick out restatements that influence the listed companies’core surplus and conduct regression analysis thirdly. Results have shown that:Financial administrators who are equipped with high professional ability can have inhibition effects on the financial restatement, and the more closer the repeat information contacting with the accounting professional knowledge, the more effective it will be.