Background Characteristics Of CFOS And The Quality Of Accounting Information

With the development of the economy, more and more corporations begin to make use of capital market for financing and more and more people participate in the market. In this progress, accounting information play an important role in reducing information asymmetry and realizing the rational allocation of resources. However, frequent incidents of financial fraud disturbed market order and reduced the confidence of public. Meanwhile, financial restatements occur more and more frequently in recent years which damaged the interests of investors and made the majority of investors doubt the quality of accounting information. Therefore, how to improve the quality of accounting information and restore the confidence of investors in the capital market, has become a problem that attracts widespread attention.As we all know, CFO involves in and supervise the production process of accounting information directly, so that he takes an inescapable responsibility for the quality of accounting information. In particular, the promulgation of SOX act not only exacerbates the CFO’s responsibilities for financial reporting further, but also makes the research on CFO increase gradually. At the same time, we note that educational background、work background、gender and other factors become more and more important in the progress of employment for CFO in a company. Can these factors make a difference to the quality of accounting information? So, this paper intends to study the effects that background characteristics of CFO makes on the quality of accounting information from a perspective of financial restatements.Firstly, this paper summarizes the properties and measurement methods of the quality of accounting information and makes a brief review of financial restatements and the relevant research between CFO and the quality of accounting information. Secondly, the paper analyzes the institutional background of CFO and financial restatements and puts forward the hypothesis based on agency theory> the theory of corporate governance and executive echelon theory. Thirdly, we use 2008-2012 A-share listed companies as samples, and study the effects that CFO background characteristics make on the quality of accounting information empirically. Then we conduct a robustness test on the basis of adding a constraint condition-the shareholding proportion of CEO. Finally, we draw a conclusion on which basis we propose future research prospects. In the end, the paper gives some reference recommendations for drawing up policy、the training of accounting personnel、 improving the structure of corporate governance、enhancing market competitiveness and other aspectsThe results show that:(1) The tenure、age and gender(female) of CFO can significantly reduce the likelihood of the occurrence of financial restatements; In other words, there is a significant positive correlation between this three factors and the quality of accounting information. (2) There is a weak positive correlation between the educational background of CFO and the quality of accounting information. This may be because that the CFO who are highly educated know how to implement earnings management using financial restatements better, so that results in a lower quality of accounting information. Overall, education has little effect on the quality of accounting information. (3) The robustness test shows that the results we found previously still hold true. Besides, it also shows that CEO will reduce the positive influence that the CFO makes on the quality of accounting information. That is to say that CEO will affect the CFO’s behavior to make decision.