An Empirical Study On The Board Characteristic And Financial Fraud Of Chinese Listed Companies

Capital market of our country have build up since19th century. At present, it has gained rapid development.. Meanwhile, financial fraud also will produce and develop. There are a lot of listed company financial affairs such as red light industry, baiwen Zheng, clever king share, Hua Yuan pharmacy and tian yi science and technology, these behavior came to the top. But, this is only iceberg corner. And problem about a listed company financial fraud has already become the social hot spot topic of conversation therefore, a listed company financial fraud behavior’s repeatedly happen, will be able to lead to people not have confidence in capital market, at the same time also leading to the society credit crisis, the existence of the credit crisis may result in a market downturn, the downturn in the market will lead to difficulties in financing. The downturn in the market will lead to financing problems.The corporate profit margins decline, and ultimately lead to the occurrence of financial fraud, this is a vicious cycle process. Turn a blind eye to the acts of financial fraud, or do not strictly combat and control, bound to affect the health of China’s capital market and orderly development. Therefore, research on listed companies’ financial fraud will be the focus of attention.General meeting of shareholders elected to the Board, and give the board oversight and strategic decision-making functions. Board of Directors in the company which have the highest decision-making power, but it is also the company’s internal oversight bodies. The Board must not only be responsible for selection, evaluation and replacement of company managers and determine their pay levels, but also decision-making and co-ordinate the company’s major business activities and investment plans. Board Governance is the company’s internal governance mechanism, the core of corporate governance plays a very important role. According to the foreign board of directors governance theory and empirical data can see that if a director will be the structure of rational and orderly operation of this must be a high-quality board of directors. High-quality board of directors will cause the value of the company to improve. Conversely, in a competitive capital market, the invalid the Board of Directors will inevitably lead to the retention of corporate fraud is not poor or even bankruptcy or be acquired.Therefore, in order to improved the company’s performance, reducing the likelihood of financial fraud, it is necessary to ensure that the core of corporate governance-the board of directors can play its proper strategic decision-making and oversight role, The Board in order to fulfill its role, it is necessary to improve board governance mechanisms, which can reflects the structure and characteristics of the board of directors. Different characteristics of the board of directors have different effects on the financial fraud. This article from the start of the board characteristics, the effect of financial fraud through the various features of the empirical data of the board of directors of listed companies, Then find characteristics which can help to reduce the financial fraud in order to be promoted in practice, which will be the contribution of this paper. This article is divided into a total of five parts.Part Ⅰ:Introduction. This part research background, purpose and significance to the main body of a book mainly, studies the train of thought and innovative point carry out brief expounding,this study pave the way for the later.Part Ⅱ:Literature Review. This section is mainly a brief review of the literature on board characteristics and financial fraud at home and abroad. Were to proceed from the board size, the proportion of independent directors, the number of board meetings, financial professionals, independent directors, leadership structure, the number and ownership of board of the Professional Committee of the seven aspects of financial fraud. On this basis, the author of previous studies to be reviewed. This section will below provide a reference basis.Part Ⅲ:Theoretical analysis. This section describes the definition of the Board of Directors, Summarizes the Board’s oversight and strategic decision-making functions as well as seven of the board of directors characteristics; Then introduced the three theories of corporate governance theory; Finally, the definition of financial fraud and financial fraud causes of the four basic theory. This section will provide theoretical support below.Part Ⅳ:An Empirical Analysis. This part is the most important part of thesis. First, the author proposes seven research hypotheses The data from China’s Shanghai and Shenzhen listed companies, screened from thel86listed companies of the financial fraud, and found186non-financial listed companies of fraud as a paired samples, SPSS17.0software on two samples of descriptive statistics, Pearson correlation coefficient analysis, paired T-test and logistic regression analysis. And finally draw some conclusions.Part Ⅴ:Suggestions and outlook. This section for the relationship between board characteristics and financial fraud, on how the Board of Directors to improve and perfect some suggestions. Finally, Put forward some inadequacies and outlook.The innovation of this paper is to:①the introduction of new explained variable;②Perspective unique;③sample is rich.