The Influence Of Management Background Characteristics On Restatement

In recent years, the proportion of listed companies has risen rapidly that issue a special announcement or an annual report directly to modify the early stage of the financial information. It seems that the phenomenon of financial restatement in listed company has become a popular trend. It’s not difficult to find that a great number of listed companies correct or supplement the earlier stage of the financial information for many times since we look up for all the temporary statements from 2009 to 2014 in WIND database. Financial restatement by listed companies resulted from Improper accounting treatment and incorrect decisions in earlier stage, and this falseness maybe because of the misunderstanding and application on accounting policy by financial staff, at the same time, executives give financial restatements subjectively to achieve its purposes such as Profit manipulation or whitewash financial statements or cover insider trading.Recently, scholars have paid a rich study about the factors that influence financial restatement. We can conclude the results into 3 points:Earnings management motivation and corporate governance structure (internal governance and external governance) and the company’s financial characteristics. After reviewing literature, the author found that few scholars pay great attention to the executive’s personal characteristics, nor did they studied whether the personal characteristics of the executives who made the financial restatements had influenced the financial restatements, actually, we can’t separate the characters and the behaviors the made. So this article aims to study the relationship between the executives’ personal characteristics and financial restatement based on the executives.First, this article review the researches about factors or financial restatement, executives back ground characteristics, executives background characteristics with the quality of accounting information, this part leads to the research contents. Then we analyze the upper echelons theory, principal-agent theory, human capital theory to executives’background characteristics and financial restatements. Later, we choose Logistic regression model to check whether executives’background characteristics influenced financial restatements. In the end, we make a conclusion and give two suggestions.We have two conclusions. First, the significant relationship between the different characteristics of executives and financial restatements are different. The four types of executives studied in this article share a significant negative relationship, and the age, gender, education and serving time are different in four types. Second, the influences to restatement from four types of executives are different. Age, gender, education and serving time of chairman have a significant effect as well as the general manager & chief financial officer and chairman of the supervisory board. While general manager,Chief financial officer, chairman of the supervisory board have a softer affection.This article takes a different point from the former scholars and checks the influence of executives’characteristics to financial restatements. On the one hand, it broaden the research of factors to financial restatements and rich the study of executives’ characteristics. On the other hand, the results of this article indicate that the roles of executives’ different characteristics are not the same to financial restatements. So the conclusion can guide the companies to reconsider the executives’ background that may affect the financial restatement.