Empirical Research Of The Relationship Between Characteristics Of Board Of Directors And Financial Fraud Behavior

The financial statement of the company is a written document that shows the financial situation within a certain period of time or a specific point. Its preparation is based on the company’s day-to-day financial accounting information, and on this basis in accordance with a fixed format, content and certain provisions of the ways and means of preparation. Thus the preparation of the financial statements to the business, operating results and cash flows. The general case of the financial statements include balance sheet, income statement, cash flow statement, statement of change in equity and notes to financial statements. Able to provide financial statements about the company’s overall financial and accounting information, this information has a very important role.Now that the financial statements are so important, it can affect the investment behavior of investors and creditors lending behavior, then bound to the company through a variety of means and methods of the actual is not a good business and financial condition whitewash good condition, and the false the information reflected in the financial statements, in order to achieve the purpose of making a profit. The financial fraud behavior occurs.Financial fraud is fraud in order to meet its pursuit of economic interests, in violation of the laws and regulations of the financial accounting means damage the economic interests of other people’s behavior, including false disclosure, unauthorized changes in the use of funds, to postpone disclosure, security breaches behavior of fictitious profits, false records, false statement of assets, improper handling general accounting, material omissions.Scholars at home and abroad that caused this financial fraud intensified mainly two reasons, on the one hand, the lack of market supervision, on the other hand due to the failure of the company’s internal governance.As the Board is in the core of corporate governance status, so the paper argues that there should be some connection between board characteristics and financial fraud behavior, ask the right recommendations for corporate governance by analyzing the relationship between the two, to reduce the probability of occurrence of acts of financial fraud. The paper selects the five board characteristics variables:the size of the board, the proportion of independent directors, two jobs-one, the stake of the members of the Board, the number of meetings of the Board.There are five parts in the paper. Part1:Introduction, Part2:Literature Review, Part3:Theoretical basis, Part4:Empirical research, Part5:Conclusion.In the conclusion, there is a "U" shape relationship between the size of the board and financial fraud. There is a positive correlation between the stake of the board of directors or the number of the meetings and financial fraud. Besides, there is no obvious correlation between two jobs-one or the proportion of independent directors and financial fraud.