Research On The Relationship Between Corporate Governance And Risk Of Material Misstatement

A series of cases of fraud at home and abroad in the stock market in recent years brings unprecedented pressure to auditors. All these force auditing field to continue to do research on the approach to improve risk-oriented audit. The beginning of auditing on contemporary business risk based auditing improved is evaluating the risk of material misstatement. Combined with the institutional background of Chinese listed companies, the thesis analyzes the relationship between corporation governance characteristics and audit risk of material misstatement. We take the characteristics that the Chinese listed companies punished by CSRC as the substitute variable of risk of material misstatement. The empirical study practices mean test and logistics regression test between the samples of Chinese listed companies with the internal governance variable such as ownership structure, characteristics of board of director etc by control of factors about size, roe and asset-liability ratio. We conclude a result that factors of the ownership composition, ownership concentration, and the CEO duality etc have effects on the risk of material misstatement. Finally we give suggestions on that basis for preventing financial fraud in china.