Empirical Study On The Relationship Between Financial Executives Of Listed Companies' Characteristics And Financial Restatement

Financial reports of listed companies are an important basis for decision-making of investors,financial restatements to some extent,reflected to the problems in corporate governance,and a large number of studies have shown that financial restatements cause severe blow to investor confidence,and have a negative impact to the company,so it attracts the attention of many scholars at home and abroad.From the status of the domestic financial restatements for investigation and analysis in this article,we found that current financial restatements phenomenon of China still common.Financial executives as a head of listed company's financial work,will be entirely responsible for financial and accounting reports of preparation process,perform the financial supervision function,and have major responsibility to the authenticity and reliability of corporate financial information.Once the company financial restatements phenomenon occurs,financial executives are to blame.And according to the theory of Hambrick and Mason's top echelon in 1984,financial executives' personal characteristics affect their financial decisions and behavior.However,the existing literature for studies of financial restatements tended to focus on corporate governance and financial characteristics of these two aspects,and most of the literature is to explore and study financial restatement from the perspective of executive characteristics,but from a financial executives characteristics research of the influence of financial restatement is less,this is also the research meaning of this article.Therefore,this paper use empirical methods to start from the characteristics of financial executives,study its correlation with financial restatements and make recommendations in order to enrich the literature in the field of financial restatements,provide a reference for future research in this field.This article first summarize the literature on financial restatements and financial executives' characteristics,and clarify the breakthrough point of reason to choose financial executives' characteristics.Then this paper introduces the present situation of the statistical analysis of the domestic financial restatements.Secondly,this article proposes six hypotheses according to upper echelons theory,principal-agent theory and incentive theory the theoretical basis of the three.Then,based on China's Shanghai and Shenzhen A shares in 2010-2014 financial restatement company and its matching of financial restatement companies as research samples,financial executives in six aspects of characteristics as variables(degrees,professional titles and qualifications,remunerations,whether ownership,whether members of the board of directors,whether in the outside unit part-time positions),empirically test the relationship between financial restatement and these six variables by Logistic regression model using Stata13.0 software.Finally,the empirical results show that:(1)the higher level financial executive paid,the less likely the financial restatements occur;(2)finance executives hold shares and part-time job outside the unit can reduce the likelihood of occurrence of financial restatements;(3)finance executives are directors of listed companies can increase the likelihood of occurrence of financial restatements;(4)the relationships between the degrees and professional titles qualifications and financial restatements are not significant.According to the empirical results,put forward the suggestion of strengthen policy and industry regulations,strengthen financial executive compensation and equity incentive system,improve the corporate governance mechanism,improve practical ability of financial executives and so on,not only provide a reference and guide for future research of our country's financial restatement problem,and to improve the system of corporate governance structure and financial executives also has important theoretical and practical significance.