Corporate Governance, Institutional Environment And Financial Statement Fraud

This paper does empirical research on relationship between corporate governance, institutional environment and financial statement fraud. The data come from the enforcement actions of the Chinese Securities Regulatory Commission (CSRC), SHENZHEN Stock Exchange and SHANGHAI Stock Exchange. The degree of the financial statement fraud of each penalized listed company is calculated in this paper. Empirical result indicates: duality of CEO, shares of manager, concentration of shareholding, operative factor market are positively related to financial statement fraud, and the tenure of company chairman, the proportion of national shareholding, the proportion of corporate shareholding, profit, the duality of auditor and the relationship of government and market are negatively related to financial statement fraud. However, proportion of outside directors, the size of the board, the size of the supervisor board and legal environments have no impact on financial statement fraud.