Deviant Strategy、Internal And External Supervision And Financial Reporting Quality

At present,the primary task of Chinese socialist modernization is still high-quality development.With the continuous development,Chinese capital market has has grown rapidly.The number of listed companies has increased obviously,but the quality of listed companies is uneven.Some listed companies have repeatedly violated laws and regulations and disclosed false financial information,resulting in frequent exposure of financial fraud,fraud and other financial scandals,which not only reduces the quality of financial reports,It has also seriously hindered the steady and healthy development of China’s capital market.The Party and the state attach great importance to it.They not only require listed companies to continuously improve their governance level,but also provide guidance on the withdrawal mechanism,the cost of violation of regulations,and the strengthening of supervision and other aspects to help the high-quality development of Chinese capital market.Moreover,with the increase of unstable factors in the global economy,there are also uncertainties in the internal and external environment faced by enterprises.In this era of opportunities and challenges,the business strategy of enterprises has also changed.More and more enterprises begin to pay attention to risk and strategic managemen,which affects all aspects of enterprise operation.Therefore,it is of great value to study the influence of corporate strategy on the financial reporting quality.Under this background,this paper,based on the strategic choice theory,principal-agent theory and bounded rational decision-making theory,and based on the relevant data of listed companies on the main board of Shenzhen and Shanghai Stock Exchange from 2014 to 2021,discusses the impact of deviant strategy on the financial reporting quality and the path of action,and selects internal control Analyst’s attention and institutional investors hold sharesg as the agent variable of the internal and external supervision mechanism analyze their regulatory role between the two.Through empirical research,the following conclusions are drawn: the deviant strategy will have a negative impact on the financial reporting quality,that is,the greater the deviant strategy,the lower the financial reporting quality;Effective internal control,analysts’ attention and Institutional investors hold shares can help to weaken the negative impact of deviant strategy on the financial reporting quality.Further research shows that operational risk plays a part of intermediary role in the process of deviant strategy affecting the financial reporting quality,that is,deviant strategy increases the operational risk of enterprises,and the financial reporting quality is reduced in order to cover up the operating risks Through heterogeneity analysis,it is found that effective internal control,analysts’ attention and institutional investors’ shareholding play a more significant regulatory role in the impact of deviant strategy on the financial reporting quality in non-state enterprises.