Study On The Relationship Between The Backgraund Characteristics Of Board Chairmen And Financial Reporting Fraud

The financial reporting fraud is one of the problems which have been troubling Accounting all the time. The false statements have been questioned by people for the function of Accounting that can reflect the true information. What is more serious is tha the financial reporting frauds are increasingly rampant in the scale and complexity in the world. The cheating behaviors have done a series of hazards to society,which have been blocked up the development of social economy at the same time.Enterprise is the tie of a series of contracts in the in the current market,whose typicial feature of is separation of two rights that produced the principal-agent relation between owners and operators. As the real controller,the senior executives is a special group in the listed companies and these executives rights come from the Board Chairmen. Through a couple of cases'studies, we can find that most financial frauds are machinated by the senior executives in most cases,especially the Board Chairman. These Board Chairmen holding no or less shares of the company posess the decision-making power in the important daily activities,so the information disclosed by financial reports of Accounting certainly contains their subjective wills. In real life the behavior choices of Board Chairmen are different because of the difference of their genders, ages and values etc.. Meanwhile foreign related researches have shown that the background characteristics of Board Chairmen have an effect on the company's behaviors. Whether the background characteristics of the listed company Board Chairmen have something to do with the company's behaviorsis worthy of further research in China, especially with the financial reporting fraud.This paper simply introduces background and significance of the research firstly, then reviews the studying achievement in financial reporting fraud by Chinese and overseas scholars and relevant theories.After that it introduces the meaning and theoretical basis of Board Chairmen and analyses the relationship between the background characteristics of Board Chairmen and financial reporting fraud for the latter empirical studies as the theoretical support. Through empirical analysis, it is found that the education degree of the chairman and the fraud have a significantly reverse correlation.And the higher the chairman's shareholding proportion is, the easier the financial reporting fraud occurs. Finally, the paper puts forward the following suggestion in allusion to the empirical analysis: Firstly, improve the education level of the Board Chairme;Secondly, change the appointment system in the state-owned enterprises gradually;Thirdly, establish effective incentive plans;Lastly, moderately decrease Board Chairmen's shareholding proportion.