Research On The Relevance Between The Board Characteristic And Financial Restatements

Accounting information is the essential factor of the resource allocation function of the capital market. The higher the quality of accounting information is,the more interests that the investors protect. Low quality of accounting information could damage the interests of investors,that is to say,the normal operation of modern capital depends on the high quality of accounting information and financial report as an essential part of accounting information is the important channel that investors know the listed company’s financial and operating status. As a result, the quality of financial reporting information has always been a focused issue recently. However, both foreign and domestic capital markers, the restatement phenomenon of financial report is more and more serious. The financial restatement refers to the errors in the financial reporting in previous accounting periods before enterprise corrected to describe the behavior of the financial information. Financial restatement shows some errors or omissions of the previous company financial report, which means that the quality of accounting information disclosed is not ideal. What’s more, financial restatement are likely to be caused by the listed company, not objective reasons, so financial restatement may be related to financial manipulations, surplus management, financial fraud, etc.Financial restatement behavior caused by various factors, but corporate governance is one of the important factors, the board of directors is an important part of corporate governance. The paper studies the relation between the board’ characteristics and the financial restatement and the features if the board of directors influence and how to influence. Firstly, this article summarized on overseas and domestic research status, starting from the financial statement and characteristics of the related concepts of the board combined with the feature of the board and the basic principle on financial disclosure research to standard, then to empirical research. Through the available empirical data of listed companies, using descriptive statistics, pairing T-test, analysis of single variable correlation and logit regression model, it can test the relationship between accounting restatement and the feature of the board. Research results show the probability of financial restatement have U correlation about the number of board scale, have negative correlation about the number of professional committees and the board who hold stakes, and have positive correlation with the number of board meeting. By the end of the article, according to the research conclusion,combining with the actual situation of the current capital market, it puts forward with some recommendations which work better and improve the quality of financial information.