Study On Internal Control,Executive Currency Salary Incentive And Financial Statement Restatements

In order to allocate resources much more effectively on the capital market,the quality of financial information disclosed by listed companies needs to be continuously improved,because the high-quality accounting information is of greatest importance to both the whole market and market participants.However,the phenomenon of financial statement restatements by listed companies in China is relatively serious,according to market development conditions.Although the phenomenon is slightly improved or worsened in different years,the development of its overall trend is not optimistic.As an important method of correcting previously disclosed financial reports with errors or supplementing previous financial statements disclosed inadequately,financial statement restatements will exert an effect on the whole capital market.The possibility of financial statement restatements bears a complex relationship with various factors concerning corporate governance.Hence,this paper intends to primarily focus on the relationships of executive currency compensation incentives,the efficiency of internal controls and financial statement restatements with a combination of normative analysis method and empirical analysis method.In addition,this paper also studies demonstrations of such relationship in different objects of property rights,according to one enterprise's classifications of different natures of property rights.Firstly,this paper selects the companies experiencing financial statement restatements on accounting data from A-share listed companies in Shanghai and Shenzhen from 2012-2016 as the research objects and focuses on financial statement restatements from the nature of property rights,executive currency compensation incentives and the efficiency of internal controls.The research hopes to provide certain assistance for reducing the phenomenon of financial statement restatements from the perspective of corporate governance.Secondly,this paper proposes a basic assumption on elements studied,formulates a model and makes an empirical analysis and inspection.According to the results,a significant negative correlation at the 1-percent level is demonstrated between the efficiency of internal controls and financial statement restatements and demonstrations of state-owned and non-state-owned enterprises are different;the adjustment function of executive currency compensation incentives on the efficiency of internal controls and financial statement restatements is obvious at the 10-percent level among non-state-owned enterprises and is in-distinctive among state-owned enterprises.Finally,this paper proposes suggestions on governmentalsupervision and corporate governance.according to conclusions mentioned above.