Empirical Study On The Effect Of Equity Incentive On Corporate Fraud Of Listed Companies In China

As an important source of fundamental analysis,the accuracy of financial information will affect our judgment of the basic value of the enterprise,so the analysis of financial fraud is particularly important.Previous research shows that corporate fraud is a common phenomenon in China and can have serious consequences for affected companies and management.The corporate fraud of listed companies will cause the public to lose confidence in their credibility and cause the company's share price to decline rapidly and cause losses to shareholders.In serious cases,it will even cause the public to lose confidence in the entire capital market,affect the healthy development of the stock market,and endanger the society stable.The significance of the existence of the capital securities market is that it can market the company's financing methods,and investors can obtain the information they want through the stock market and trade.If the accuracy of the information obtained is too low,it will affect the normal functioning of the entire market.If you can not accurately analyze the causes of corporate fraud,the phenomenon of corporate fraud can not be fundamentally resolved.For various factors that affect corporate fraud,this paper pays attention to the analysis of the influencing factors of equity incentive.Equity incentive,as a way to reduce the agency problem,is currently undergoing continuous development in China.Therefore,it is also very important to analyze its impact.Equity incentives are incentives that are issued to motive employees in the form of stocks or similar stocks.Usually,they receive some restrictions when exercising their rights.The core goal of equity incentives is toreduce the interest-seeking behavior and maximizing the interests of shareholders by combining the interest of the incentives receiver with the interests of the company to achieve benefit sharing and risk sharing.The study of the impact of equity incentives and corporate fraud on listed companies in China is very important.There are three main reasons.First,China's economy contributes significantly to global GDP growth;Second,China's capital market has grown rapidly and has become the one of the world's major financial markets;Third,the Chinese authorities encourage the use of stock rights,one of the western executive compensation systems,to motivate the the executives.The Chinese economy is characterized by a unique ownership structure and corporate governance model,so the impact of equity incentives of listed companies in China on financial fraud have special meaning.After our empirical analysis of the listed companies using the logistic model from 2008 to 2016,we draw the following conclusions: 1.The impact of management equity incentive on corporate fraud is significantly and positively related.2.The equity incentive of supervisor board is negatively related to the impact of financial fraud,but the result is not significant.3.CEO and chairman of the two companies combined more likely to cause corporate fraud.When CEO and Chairman of a company are different individuals in a company,the impact of management equity incentive on corporate fraud is more significant than the company with CEO duality.