Game Analysis And Empirical Test Of Financial Fraud Supervision Of Listed Companies

According to the CSRC,it’s easy to find that the number of financial fraud is on the upswing,which results in the low quality of most listed companies in the market.Besides,it’s difficult for investors to make correct decisions.The research on the motivation of financial fraud is relatively mature both at home and abroad.While this paper focuses on the relationship between the supervision of regulators and financial fraud of listed companies.The main idea of this paper is the following steps.Firstly,the theoretical analysis,which includes the first two chapters of this paper,summarizes the theoretical analysis,identification and prevention of financial fraud in domestic and foreign literature.The second is the case study,which contains the third chapter of this paper,and takes ST Xin Yi financial fraud as an example to explain the causes and negative impacts of financial fraud in China.The third is empirical analysis,which covers the fourth,fifth and sixth chapters.Firstly,this paper constructs the static model of listed companies and regulators and analyzes the utility function of both sides by using the game analysis model.Then,it not only establishes the evolutionary game model of listed companies and regulators but also puts forward the hypothesis the stricter the legal environment,the less the probability of financial fraud of listed companies.Then,by using the logistic regression model,the listed companies with financial falsifications occurring during 2016-2020 are selected and matched with a listed company without falsifications according to the principle of 1:1.The empirical results are consistent with the hypothesis of this paper and pass the robustness test,which makes the conclusion more reliable.To further analyze the mechanism of the legal environment affecting the probability of financial fraud,this paper uses the social responsibility report score of listed companies to measure the quality of information disclosure of listed companies as a mediating variable.Through the mediating effect model,it is verified that the enhanced legal environment is weakening the probability of financial fraud of listed companies by affecting the quality of information disclosure of listed companies.This paper is novel in its choice of topic and analyzes the strategic choice of financial fraud and regulation of listed companies through a game model,and evolves a dynamic game model to further conclude that the probability of financial fraud of listed companies will decrease with the improvement of legal environment.The paper further verifies it by using logistic regression model.For the selection of variables,paper uses the marketization index compiled by Fan to measure the level of legal environment in each region.The results of the empirical study show that the findings of this paper are reliable and conclude that financial fraud of listed companies has a negative relationship with the level of legal environment in each region.Finally,this paper innovatively uses the mediating effect model to explain the mechanism of the effect of the improved legal environment on the disincentive effect of financial fraud of listed companies.In the process of mediating effect model analysis,it is concluded that improving the quality of information disclosure of listed companies can further enhance the degree of influence of legal environment level on financial fraud of listed companies,which makes the research of this paper richer.