Study Of The Rerationship Among Management's Background Characteristics,salary Incentive And Financial Restatement

Financial report is the most important source for investor to know the information of listed companies.The high quality of the financial accounting information is the basis of capital market to operate effectively and develop healthily.Financial restatement is the behavior of enterprises to restate the errors existing in the financial report released in the past.Financial restatements will cause serious adverse reactionin the securities market,making theability and integrity of company's management questioned,firms' share prices plummeted,and the capital market unstable.In recent years,financial restatement is a common phenomenon in our country,which has disturbed the order of the capital market,causing serious economic consequences.The incidence of financial restatements is influenced by many factors.The company's management as major decision makers,their background characteristics will affect the possibility of financial restatement.And under the influence ofthe salary incentive and managers' different subjective factors,the salary incentive will have a regulating effect on the relationship betweenmanagement's background characteristics and the possibility offinancial restatements.In this paper,on the basis of literature review related tofinancial restatement,management's background characteristics and regulatory effect of salary incentive,defining the management and the background characteristics of management,salary incentive and the financial restatement and analyzing the high-rise ladder theory,principal-agent theory and behaviorism motivation theory are aimed at illustrating that the background characteristics of the management including the proportion of women in management,management's average age,average degree and average tenure and the level of salary incentive could influence the possibility of financial restatement,and the salary incentive could have a regulating effect on the relationship betweenmanagement's background characteristics and the probability offinancial restatements.This article selects 2013-2015 Shenzhen and Shanghai A-share main board listed companies as the research sample for empirical research.We first carry out descriptive statistics analysis on the sample to grasp the characteristics of the sample on the whole.Then we analyze thecorrelation between the independent variables.Finally we conduct the logistic regression analysisto verify the relation of the three,among the management's background characteristics,the salary incentive and the probability of financial restatements.The study found that the proportion of women in management,management's average tenure,the salary incentive are negatively related to the probability of financial restatementsignificantly,management's average degree is positively related to the probability of financial restatementsignificantly,and the salary incentiveplays a significant regulatory role in the relationship between the background characteristics of management and the probability of financial restatements.According to the result of empirical study,this paper puts forward some suggestions,including consummating the financial restatement standardizing system,improving the company's employment system and establishing a scientific and effective incentive mechanism.