Executive Power,Audit Committee Financial Expertise And Financial Restatements

A sound corporate governance system is of crucial importance to the healthy development of capital markets.In recent years,a series of reform measures of corporate governance have promoted the healthy development of capital markets,but the occurrence of financial restatements has also shown an increasing trend.With the frequent occurrence of financial fraudulent activities by well-known domestic and foreign enterprises,the quality of accounting information gradually arouses widespread concern in the capital market participants and regulators and even the general public.Financial report is an important carrier of accounting information,accounting information users access to important information channels,the occurrence of financial reporting restatements means that the company's previous accounting information quality problems.As one of the professional committees set up by the Board of Directors,improving the quality of internal control,enhancing the level of corporate governance and improving the quality of accounting information are important functions of the Audit Committee.The Sarbanes-Oxley Act promulgated by the United States in 2002 proposed that an independent director with financial expert status should be hired to ensure its independence and professional competence.Article 52 of the 2002 Guidelines for Governance of Listed Companies stipulates that at least one member of the Audit Committee Independent directors are accounting professionals.This shows that regulators have realized that the financial expertise of the audit committee is of great importance to the quality of accounting information.The financial expertise of the audit committee can effectively restrain the financial restatement.However,as an institutional arrangement embedded in the corporate governance system,the efficiency of the audit committee must be affected by the internal governance environment of the company.Driven by rent and other interests to interfere with the quality of accounting information company behavior,the greater the power of executives,the possibility of interfering in the quality of accounting information,the higher the success rate.At present,most of the domestic and foreign researches mainly focus on the audit committee's characteristics and internal control flaws,the CEO's power and financial restatement.Few people explore whether the financial expertise of the audit committee can effectively restrain the financial restatement under the interference of executive power.Someone can combine the nature of property,the legal environment for more detailed research.In our opinion,the higher the executive power,the stronger its ability to interferewith the financial expertise of the audit committee to inhibit the financial restatement.At the same time,we find that the power of management varies greatly depending on the nature of the property.The intervention of the Audit Committee Further,we think that the differences of the legal environment will affect the exercise of executive power.The good legal environment is an important guarantee for perfecting and implementing various systems.Under the restriction of different legal environments,the executive power is affected There are also differences in the binding force and their effectiveness in intervening with the audit committee's financial expertise.Therefore,we study the following hypotheses.H1: The stronger the financial expertise of the audit committee,the less likely the financial restatement will occur.H2: The executive power will interfere with the inhibitory effect of the financial expertise of the audit committee on the financial restatement.H3: The power of the executive powers to intervene in the Audit Committee Financial expertise has a different effect on financial restatement inhibition;H4: Under different legal environments,the effect of executive power interference on the audit committee's financial expertise has a different effect on financial restatement.This research firstly systematically reviews the literature on executive power,audit committee and accounting information quality,internal control and so on.Secondly,it sorts out the related concepts as well as the executive power,the financial expertise of the audit committee,the financial restatements,the nature of the property rights,the legal environment Finally,this paper selects the 2010-2015 A-share listed companies in Shanghai Stock Exchange,from the Cathay Pacific,Juchao network manual collection of audit committee members,executives and accounting information quality information,and then Logit model was used to test the data.It was found that the financial expertise of the audit committee significantly inhibited the occurrence of financial restatements.Executive power significantly interfered with the inhibitory effect of the financial expertise of the audit committee on the financial restatement.In the property group examination,it was found that the state-In the nature of property rights,the executive power has a stronger intervention on the audit committee's financial expertise to restrain the effect of financial restatements.Further research found that under the property rights of state-owned enterprises and the legal environment,the executive power interferes with the financial expertise of the audit committee Financial recap Finally,I hope this study based on the experience of practice can provide better policy recommendations for the construction of audit committee,the scientific distribution of executive power and increase the value of the company,hoping to help promote the revision and improvement of governance principlesfrom " Event-driven " type steering " rules lead " type.