Research On The Influence Of Overconfidence On Financial Restatement Under The Control Of Executive Power

In recent years,the phenomenon of repeated financial restatement of listed companies has become an important factor disrupting the order of the capital market.Previous studies on the factors of financial restatement have mostly started at the corporate level.While managers are the main decision makers,their psychology and behavior are equally important to the occurrence of financial restatements.On the other hand,with the deepening of people's understanding of Behavior Finance Theory,the theory related to overconfidence has gradually become the academic hot spot of this theory.Therefore,from the perspective of overconfidence of managers,this study researches the relationship between overconfidence and financial restatement through theoretical derivation and empirical analysis.This study firstly sorts out and summarizes the domestic and foreign literatures on overconfidence,executive power and financial restatement,and finds the research opportunity from them,laying the foundation for theoretical discussion and empirical analysis.Based on the literature review,this study elaborates the concept of overconfidence,executive power and financial restatements,combines the core contents of behavioral finance,high ladder team and principal-agent theory,deduces the positive correlation between overconfidence and financial restatement and the regulating effect of executive power,and puts forward the research hypothesis.In the empirical part,this study selects the main board listed companies in Shanghai and Shenzhen from 2015 to 2017 as samples,and uses logistic regression to analyze how overconfidence and executive power affect financial restatement.After empirical research,this study finds that the overconfidence of executives of listed companies in China has a positive impact on financial restatement.The overconfidence of the executive will lead to the increase of financial restatement motivation,which is more likely to lead to the occurrence of financial restatement.The power of executives will strengthen the influence of overconfidence on financial restatement.That is to say,when the executive power increases,the overconfidence of the executive will lead to more financial restatement.Finally,based on the research conclusions,the study puts forward suggestions from three aspects: restraining the psychological characteristics of overconfidence of senior executives,rationally allocating the power of senior executives,and optimizing the internal and external supervision mechanism of the company,and specifically analyzes how to curb the occurrence of financial restatement.