Empirical Research Executive Background And Financial Restatements

Financial restatement is the subsequent remediation for previous financial reportwith wrong or misleading information. Since later1990′s, the increasingly frequentand prevalent financial restatements have received extensive attention from academia.The research on financial restatement not only improves the disclosing quality of thelisted company, but also reinforce protection on investors and improves governmentsupervision. In future, it will become useful reference for enhancing financialrestatement system. Therefore, academic study of financial restatement will not onlyhelp improve the quality of information disclosure of listed companies, strengtheningthe protection of investors and improve the government supervision, will furtherperfect the system of financial restatement in our country for the future in order toprovide the beneficial reference.Based on the Shanghai and shenzhen two city2004-2011listed companies as theresearch sample, according to Hambrick and Mason (1984) put forward by the upperechelon theory (TMT), was studied by adopting the method of matching analysis,logistic regression, executive background characteristics and the relationship offinancial restatement. Research of this paper is divided into two stages: the first phaseof the study show that executives background characteristics affect the listed companyfinancial restatement. Specifically:(1) the executive team size, the greater thefinancial restatements are more likely to happen;(2) executives in male gender, themore the easier financial restatement;(3) senior management team and the chairmanof gender differences, the greater the financial restatements are more likely to happen;(4) senior management team with the age difference, the greater the financialrestatement is more likely to happen. On this basis, this paper conducts research in thesecond stage, financial restatements has occurred in the enterprise, the executives oflisted companies affect their different background characteristics choose differenttypes of financial restatement, the study found that:(1) the senior management teamthe larger, the easier the fraudulent financial restatement;(2) the executive team size,the greater the non-core financial restatement is more likely to happen;(3) seniormanagement team in male gender, the more the easier non-core financial restatement;Age (4) senior management team qualification, senior management team of financialrestatement type had no significant influence. Characteristic of this paper lies in:(1) using the upper echelon theory, from theAngle of background characteristics of executives of listed companies to study thefinancial restatement, and made some research achievements, broadening the researchfield of vision. The listed company financial restatement (2) in the process of study,considering the listed company senior management team and the chairman ofdifferences in gender, age, educational background, has made some researchachievements, broaden the depth of the study on the senior management team.(3) inthe process of research, to subdivide the types of financial restatement, this paperstudies the different background characteristics of executives is affecting the companyexecutives choose what type of financial restatement. We hope that we study thetheory can suitable for special is in economic transition period of China. In this paper,the research company accounting policy choice and regulating the behavior offinancial restatement, and perfect the corporate governance structure has the certainenlightenment function.