CEO Power,Audit Committee Characteristics And Financial Dilemma Of Enterprises

After 40 years of reform and opening up,China's economy has achieved many amazing results,but at the same time it has accumulated many problems.Especially since the financial crisis in 2008,due to changes in China's relevant fiscal and monetary policies,many companies have accumulated a large amount of debt.Since 2018,the default of the bond market has entered a normal state,and the event of default has continuously set a new record high.Recently,not only the 300 million bonds of Beijing's private top 100 Lova technology constitute a substantial breach of contract,but even enterprises(the young eagle farming and animal husbandry)staged a "meat compensation" drama.On the one hand,the tide of bond defaults is due to the fact that China is in the period of economic shifts of internal and external troubles,and some enterprises have problems in their operations;on the other hand,the implementation of the “deleverage” strategy has led to enterprises facing financing tightening.Pressure,companies lack sufficient cash flow.Corporate bond defaults are often a manifestation of problems with the financial situation and a precursor to the company's financial distress.The company's financial dilemma will not only cause the company's value to face significant losses,but also cause losses to investors and creditors.When large-scale companies fall into financial dilemma,they will have a negative impact on a country's economy and damage market confidence.There are many reasons for enterprises to fall into financial difficulties.At present,domestic and foreign scholars' research on the causes of financial distress mainly divides these factors into two aspects: external factors and internal factors.The external factors affecting the financial distress of enterprises are: macroeconomic policy,interest rate level,inflation rate,etc.;internal factors include: internal governance level,shareholding structure,and speeding growth.For external factors such as macroeconomic policies and interest rate levels,companies cannot change and only passively adapt.But for internal factors,such as internal governance,companies can take the initiative to change,so that in the face of external environmental challenges,they can enhance their ability to respond and reduce the probability of enterprises falling into financial dilemma.As a practical problem formed by the separation of ownership and management rights of modern enterprise organizations,CEO's power has many influences on the development of enterprises.For example,CEO power is linked to the degree of earnings management and the quality of information disclosure.As a professional committee under the board of directors of a listed company,the Audit Committee is mainly responsible for the company's supervision over the disclosure of financial statements and the internal control process.In the company's board of directors for the company's information disclosure,accounting information quality,internal audit and external independent audit,the implementation of control and supervision functions,the audit committee's effective performance depends on its independence and professionalism.In summary,this paper selects the non-financial insurance company data listed in the Shanghai and Shenzhen A-shares from 2011 to 2017 as the initial research sample,and explores the relationship between CEO power and audit committee characteristics and corporate financial distress.According to the results of empirical analysis,the following conclusions are drawn:(1)There is a significant positive correlation between CEO power and corporate financial distress;(2)There is a significant negative correlation between audit committee independence and professionalism and corporate financial distress.(3)The independence and professionalism of the audit committee can weaken the influence of CEO power on the financial distress of the enterprise;(4)Compared with non-state-owned enterprises,the independence and professionalism of the state-owned enterprise audit committee can weaken the CEO's power to the enterprise.The impact of financial distress.Based on the conclusions of the research and the reality of our country,this paper puts forward the policy recommendations for improving the corporate governance mechanism,and contributes to the improvement of the audit committee system and the balance of CEO power of listed companies in China.