The Influence Of Listed Compani’ Esinternal Governance On Fraudulent Financial Reporting

Thus, it has become a very important issue to regulate and govern the fraudulentfinancial reporting of listed companies, which is also of great practical significance. Thisthesis intends to study the influence of the inner corporate governance structure on financialreporting fraud from the perspective of corporate governance structure of listed companies inour country. Then, this thesis will try to explore the possible suggestions to prevent fraudulentfinancial reporting from the perspective of the inner corporate governance structure.First, this thesis has given a clear definition on the fraudulent financial reporting,corporate governance, and other relevant terms. Based on these, this thesis elaborated themain theories, such as corporate governance and financial reporting fraud, and then exploredthe theoretical relationship between these and financial reporting fraud from the three aspectsof shareholders governance, Board of Directors governance and the Supervisory Boardgovernance. Then the thesis put forward a hypothesis about the influence of the innercorporate governance structure on financial reporting fraud from the perspective of ownershipstructure.Based on the research hypothesis, the listed companies punished by CSRC, ShanghaiStock Exchange and Shenzhen Stock Exchange due to fraudulent financial reporting from2011to2014are selected as the research samples, and the matching samples are also selected.Through the paired t-test, it shows that there is no significant difference in the stakeownership structure, Board of Directors governance and the Supervisory Board governancebetween the fraud companies and non-fraud companies. Finally through the establishment oflogistic return model, the thesis explored the influence of board features, equity structure, andsupervisory board features on financial report fraud respectively, which found that the boardsize is negatively correlated with the possibility of fraudulent financial reporting;the numberof Board Conference is positively related to financial report fraud;the proportion ofindependent directors is negatively related to financial report fraud; independent directorsexpress their views is negatively related to the possibility of fraudulent financial reporting;establishment of the Board of Auditors was negatively correlated with the possibility offraudulent financial reporting. Ownership structure: the percentage of State-owned equity ispositively correlated with fraudulent financial reporting;the proportion of corporate shares ispositively correlated with fraudulent financial reporting;non-restricted stock is negativelyrelated to fraudulent financial reporting;the number one stock ratio is positively correlatedwith fraudulent financial reporting;the number of shareholders ’ meetings is negatively relatedto fraudulent financial reporting. It show that characteristics of Board of Directors and ownership structure has significant influence on the fraudulent financial reporting,the scale ofthe Supervisory Board has no significant influence on the fraudulent financial reporting.According to the conclusions of the study, suggestions to improve the internal corporategovernance are proposed from the Board governance, shareholder governance andsupervisory board governance levels, so that it strengthens the prevention and governance offraudulent financial reporting.