Influence Of Board Characteristics On Financial Fraud Under Different Degree Of Equity Concentration

The financial fraud of listed companies will not only harm the interests of the internal and external parties,but also have a negative impact on the healthy operation of the entire market.Therefore,it has become a hot spot in the financial and academic circles.The board of directors also plays an important role in the overall governance mechanism of the company.Its role and responsibility can fully reflect the important impact on the quality of financial reporting.The existing literature has conducted a lot of research on the causes of financial fraud from the perspective of the governance of the board of directors in the company.Scholars have studied the characteristics of the board of directors,such as whether the size,gender ratio of members,frequency of meetings held,and members 'remuneration affect fraud.However,no consistent conclusion has been obtained.Therefore,the current research focus is to further find out the reasons for the different conclusions.At the same time,it provides reference for the company to prevent financial fraud through research,so as to better rationalize the structure of the board of directors,play its role,and improve the internal governance mechanism of the company.This paper discusses whether the characteristics of the board of directors are related to the occurrence of financial fraud in the company.Considering the background of the real system,the third variable equity concentration is added as a regulator to test the influence of the relationship between the two.A total of 150 samples of financial fraud of listed companies were selected for the five-year period from 2012 to 2016.The sample of 150 non-fraud companies with similar profits and scale was also included.The statistical analysis was based on the above overall sample.First,a matching analysis was made of the five different dimensions of the characteristics of the board of directors(size of the board,gender composition,proportion of sole directors,whether or not the two positions are combined,and the number of meetings).A sample of financial fraud was found to have significantly more board size and board meetings than non-financial fraud.On the contrary,the difference between the two groups of variables: the gender composition of the members,the proportion of sole directors,and whether or not the two functions are combined is not significant.Second,this paper adopts Logistic regression to test and analyze.Through the conclusion of the analysis,the five dimensions of board characteristics,the size of the board of directors and the number of meetings held these two dimensions will have a positive impact on financial fraud.The other two dimensions of the company's two positions and the proportion of independent directors do not have a clear relationship with financial fraud.The gender composition of the board members of the board of directors will indeed have a negative impact on financial fraud.Finally,the article carries on the adjustment effect analysis,the result shows that after joining the equity concentration,the size of the board of directors that existed before and the number of meetings held will further increase the positive effect on fraud.What is different from the assumption is that the relationship between the dimensions of the three boards of directors,the proportion of independent directors,the gender composition of members,whether they are two positions,and financial fraud has not been affected by the adjustment of equity concentration.Based on the results of empirical analysis,the paper summarizes the analysis conclusions,analyzes the reasons for the inconsistency between the assumptions and the assumptions in the empirical conclusions,and puts forward the following suggestions for the company to improve the board of directors system and prevent financial fraud: reasonable control of the board of directors and strengthen the supervision role of independent directors.,Regulate the content of meetings,ensure the quality and efficiency of meetings,reduce the combination of two positions,and appropriately increase the number of female directors.