Accounting Experience Of Board Secretary And Stock Price Crash Risk

In recent years,China’s A-share market has frequently seen the phenomenon of sharp decline in share prices.The collapse of share prices has greatly reduced the market value of listed companies in a short time,which will not only affect the daily operation of enterprises,but also destroy the confidence of market participants.Indeed,stock price crash risk causes a bad influence on the stability of the stock market,and go against the further development of the capital market.Hence,it is of terrific meaning to study influencing factors of stock price crash risk.The cause of the risk of stock price crash risk is that the senior managers of enterprises often choose to hide some bad news and do not disclose it in time in order to obtain their own interests.However,when the bad news accumulates too much and has to be disclosed intensively,it will result in stock price crash risk.Therefore,better disclosure can effectively narrow the digital divide between investors and managers,improve the credibility and timeliness of the company’s market value,and reduce the risk of a stock market crash.As the only contact person designated by the CSRC,information disclosure is the responsibility of the Board Secretary.The experiences of accounting enable them to acquire professional knowledge,so the Board Secretaries with financial experience will be more proactive in making more understandable information disclosure and enhancing information transparency.In addition,by means of professional ability and social connections,Board Secretaries with financial experience can help listed companies to build better investor relations,and close investor relations will further increase the difficulty of covering up bad news,which will decrease the level of information gap and help to relief the risk of stock price crash.Based on the information theory,signal transmission theory,branding theory and high-level ladder theory,this paper used the data on A-share listed companies in Shenzhen between 2016 and 2020 to conduct empirical researches.Firstly,this paper used the OLS model to explore whether the accounting experience of the Board Secretary has an effect on the stock price crash risk.Secondly,a mediating effect model was developed to explore whether the quality of disclosure and the number of tracking analysts play mediating roles in the mentioned effect.Finally,the substitution method,supplementary method and propensity score matching method were used in this paper successively to test the stability of the empirical results.The results of the study shows that(1)Board Secretaries who have engaged in accounting work have more professional accounting knowledge and skills,and have a better understanding of the rules of capital market operation and investors’ information needs,which can better handle the disclosure work and significantly reduce the possibility of a stock price crash;(2)There are two mechanisms through which the accounting experience of a Board Secretary impacts stock price crash risk.First,the Board Secretaries with accounting experience are more professional and honest,they will be more active to disclosure information,which is helpful to decrease stock price crash.Second,Board Secretaries with financial experience can communicate with investors more efficiently and help to maintain investor relations.Therefore,the listed companies will gain more attention from investors,which will increase the cost of concealing negative information,and reduce the information barriers.