Research On The Influence Of CFO Auditor’s Background On The Earnings Quality Of Listed Companies

Earnings information has always been a concern for corporate shareholders and other stakeholders in the capital market.For corporate shareholders and other stakeholders in the capital market,earnings information has always been a concern,it is the most important part of accounting information,not only by external investors as an important basis for decision-making,but also related laws in China.The regulations also use it as an indicator of whether certain policy preferences can be obtained,which shows the important role of earnings information.In recent years,with the continuous development of the capital market,some listed companies have emerged through the management of earnings management and financial fraud,which has reduced the company’s earnings quality,which is not conducive to the management of listed companies and the healthy development of the capital market.Therefore,for investors and capital market regulators,it makes sense to examine the factors affecting the earnings quality of listed companies and how to improve the quality of earnings.The high-level echelon theory believes that the background characteristics of company executives will have a great impact on the company’s strategic decision-making and performance.This suggests that we should pay attention to the background characteristics of company executives when analyzing the factors affecting the company’s earnings quality.As the main person in charge of the company’s financial system,CFO is the processor of the company’s accounting information,which can greatly affect the accounting policies and accounting estimates of listed companies,so compared with other executives,the impact of CFO on the company’s earnings quality It may be more direct.CFOs as financial system leaders must have sufficient expertise to be qualified for this position,so auditors in accounting firms have become an important source of CFO groups.When auditors work in listed companies,their professional skills and work experience will also be brought to listed companies,because professional experience will affect individual cognitive characteristics and decision-making behavior,so they will be treated in the process of making financial decisions.The impact of the auditor’s professional experience.The research literature on CFO background characteristics and earnings quality mostly examines the influence of CFO’s personal background characteristics such as gender,age and other heterogeneity on the company’s earnings quality,and the lack of research on the influence of CFO’s professional background characteristics and corporate earnings quality..The auditor’s background CFO has a wealth of expertise in accounting auditing and proficiency in the audit process,which may affect the company’s earnings management behavior,which in turn affects the company’s earnings quality.Therefore,it is of theoretical and practical significance to examine the impact of CFO’s auditor background on the earnings quality of listed companies.This paper not only examines whether the CFO’s auditor background has an impact on the company’s earnings quality,ie,the extent of the impact of the study,but also reveals the CFO by comparing the differences in the impact of CFO auditor background characteristics on earnings quality under different CFO power and property rights.The role of power and property rights in the relationship between CFO auditor background characteristics and earnings quality answers the question of when the background characteristics of CFO auditors affect the company’s earnings quality,that is,the problem of influencing conditions.In order to carry out the above research,this paper selects the A-share listed companies with CFO changes between 2005 and 2014 in China’s securities market as the research object,and empirically tests the impact of CFO auditor background on the earnings quality of listed companies.The full text is divided into six parts.set forth:The first part is the introduction,introduces the research background of this paper,and puts forward the problems to be studied in this paper,as well as the theoretical and practical significance of the research.Further,the research content,methods and research innovations of this paper are put forward..The second part is conceptual definition and literature review.Firstly,the concepts of earnings quality and CFO auditor background to be studied in this paper are defined,and the research objects are clarified.Secondly,the impact of CFO background characteristics on earnings quality and the audit of senior executives are respectively studied.The related literatures were reviewed in three aspects:the literature research related to the background and the other influencing factors of earnings quality.Finally,the literature review was carried out.The third part is the theoretical basis and research hypothesis.This part first introduces the theoretical basis of this paper,including the high-level echelon theory,social identity theory and information asymmetry theory.Secondly,based on theoretical analysis and logical reasoning,the paper puts forward the article.The hypothesis of the study concludes with a summary of the relationship between the research hypotheses.The fourth part is the research design.This part mainly introduces the source of empirical data,the setting of empirical model and the definition and measurement of related variables.The fifth part is the empirical analysis and results.This part verifies the rationality of the hypothesis of this paper through descriptive statistical analysis,correlation analysis and regression analysis of empirical data.In addition,in order to ensure the reliability of the empirical results,this paper also conducted a robustness test.In addition,through the further analysis,the paper analyzes the impact of the"Corporate Association" of the auditor background CFO on the company’s earnings quality,and further tests the relationship between the CFO auditor’s background characteristics and the company’s earnings quality by quantile regression.The sixth part is the research conclusions,policy recommendations and research limitations.According to the results of empirical analysis,the conclusions of this paper are summarized,and relevant suggestions are put forward for the existing problems.Finally,the research limitations that may exist in this paper are pointed out.The study found that companies with an auditor background CFO had lower earnings than companies with an auditor background.Compared with low-power CFOs,CFOs with high power have an auditor background that reduces the company’s earnings quality.More significant;compared with state-owned enterprises,the CFO of non-state-owned enterprises has a more significant impact on the company’s earnings quality.According to the conclusions of this paper,considering the actual situation,firstly,this paper suggests that the management of the company should further strengthen the supervision of the impact of the CFO with auditor background on the company;secondly,the regulatory body should introduce measures to strengthen the behavior of restricting the auditor’s "job change".After becoming a senior executive of a listed company,the CFO with an auditor background not only failed to play its own regulatory role to safeguard the company’s interests,but strengthened the company’s earnings management behavior and reduced the company’s earnings quality;again,for CFOs and other senior executives In the background of auditors,accounting firms should strengthen audit independence when conducting audit activities for such companies,actively defend against audit risks,give full play to their supervisory role to the company,and improve the company’s earnings quality;The power is too large to prevent the lack of supervision,so that the CFO damages the long-term interests of the company based on self-interested motives,and also conducts regular assessment and supervision of the CFO of the auditor background,so that it can play its own professional advantages and enhance the company’s financial report.Level.The innovations that this paper may have include the following:(1)Deepen the research on the impact of CFO professional background characteristics on earnings quality,and use the professional experience of CFO auditors as a starting point to broaden the research perspective of listed companies’ earnings quality;Not only does it examine whether the CFO’s auditor background has an impact on the company’s earnings quality,ie,the extent of the impact of the study,but also reveals the CFO by comparing the differences in the impact of CFO auditor background characteristics on earnings quality under different CFO powers and property rights.The role of power and property rights in the relationship between CFO auditor background characteristics and earnings quality answers the question of when the background characteristics of CFO auditors affect the company’s earnings quality,that is,the problem of influencing conditions;(3)Companies that have CFO changes are sampled,instead of using the usual cross-sectional data,but by manually collecting the sample data to be studied,research based on CFO change events can alleviate some endogeneity problems and make the conclusions more credible.