Market Competition, Management Power And Financial Restatement

Since the beginning of the 20 th century,a series of frequent accounting scandals have greatly affected the order of the capital market and the confidence of investors,accounting information distortion of the chaos prevalent.Accounting information is the main basis for investors to invest abroad,and financial reporting as an important way to disclose the accounting information to the outside world,so the quality of the capital market and investors have an important impact.Financial restatement as a direct expression of the quality of corporate financial statements,whether it directly reflects the quality of corporate accounting information.At present,the financial restatement events occur frequently on a global scale,and financial restatements are becoming more frequent,and the number of companies is increasing dramatically.The United States "Enron" incident,"WorldCom" incident,China's "silver Guangxia" incident,"Zhang Zi Island" incident,behind the financial restatement has a shadow.Therefore,it is important to study the influencing factors of financial restitution to regulate the order of capital market and enhance investor confidence.Based on the influence of corporate governance on financial restatement,this paper examines the influence of market competition and management power on financial restitution under the interaction effect of management power and market competition.This paper uses competitive theory and optimal contract theory to analyze the market competition.At the same time,it uses the principal-agent theory,information asymmetry theory and behavior theory to clarify the influence mechanism of market competition on management behavior,clarify market competition and management power at the theoretical level The Impact of Financial Restatement.Because of the different economic consequences of different financial recapivities,this paper divides financial restatements into core financial restatements and fraudulent financial restages according to their economic consequences,and then studies market competition and management Type financial restatement.The results of this study show that:(1)management power and financial restatement was significantly positive correlation.With the improvement of management power,it has absolute control over the generation and disclosure of corporate financial reports.At this time,management has to maintain the existing rights in order to maintain the existing reputation,and will be disguised.Outside the disclosure of unreal information,resulting in the occurrence of financial restatement.(2)There is a significant negative correlation between market competition and financial restatement.Market competition helps to improve the quality of accounting information,slowing down the occurrence of financial restatement.(3)market competition for the management of the power is too large and the financial restatement has a significant inhibitory effect.Fierce competition in the market makes enterprises face a huge business risk,management in order to reduce the business risk,will increase the disclosure of accounting information to enhance the quality of accounting information,thereby reducing the occurrence of financial restatement.Market competition as the company's external governance mechanism,when the management power is too large lead to the company's internal governance mechanism fails,its internal governance mechanism for the company has a complementary role.(4)Further research shows that there is a significant positive correlation between management power and core financial restatement,and there is a significant negative correlation between market competition and fraudulent financial restatement.With the increase in management power,management in order to seek personal gain,which tend to directly on the operating income,operating costs,operating costs of these three core accounting indicators to control,resulting in the core financial restatement.At the same time,fierce market competition helps to prevent the occurrence of fraudulent financial restatements.