Board Faultlines,Effort Level And The Quality Of Accounting Information

The quality of accounting information has a direct impact on its role in social economy,whether the market economy can operate orderly,whether the modern enterprise system can be effectively established,and at the same time,high-quality accounting information also helps to eliminate corruption from the source.Several eeonomic crises and ever-lasting accounting fraud scandals from the last century to the present have made the quality of accounting information,a topic that has long attracted the attention of academia at home and abroad,never leave people’s vision.Improving the governance structure of listed companies is one of the important ways to improve the quality of accounting information.Corporate governance structure is a kind of institutional arrangement for company management and control.Its perfection directly affects the healthy development of listed companies and securities markets,and its perfection degree restricts the quality of accounting information of listed companies.The board of directors is the key link of corporate governance structure,which connects shareholders and managers,and plays a very important role in the operation and management of the company.Therefore,how the composition of directors affects the quality of accounting information is a very important issue.Previous studies on the relationship between the two have mostly focused on the characteristics of the board as a whole,such as the size of the board and the proportion of independent directors.In recent years,scholars have begun to pay attention to the characteristics of the board members.However,scholars have focused more on the diversity of the board of directors,that is,the number of categories of one or some attributes among the board members,while ignoring the multiple attributes of the board members.The aggregation of these different attributes will lead to the division of directors into different subgroups,resulting in the formation of group faultlines.Therefore,this paper introduces the concept of faultlines,aiming at dividing directors into relatively homogeneous and heterogeneous groups based on the characteristics of directors,and analyzing the impact of board composition on the quality of enterprise accounting information by studying the differences among subgroups.The outbreak of the financial crisis in 2008 has led to increasing calls for enhancing the effectiveness of board worldwide,and the effectiveness of board depends on the ability and responsibility motivation of directors,that is,the level of effort.Therefore,from the perspective of I(input)-P(process)-O(output),this paper will further verify the mediating role of effort level between the faultlines of board and the quality of accounting information.This paper takes Shanghai and Shenzhen A-share listed companies from 2013 to 2017 as the research object,and selects six attributes of board members,including gender,retirement age,financial experience,independent director,shareholding and tenure,to divide the board faultlines.Based on the social identity theory,the principal-agent theory,and the theory of the high echelon team,it focuses on the analysis of the impact of the faultlines on the quality of accounting information.At the same time,this paper uses the effort level of the board as the proxy variable of directors’ behavior to study its intermediary role between the board faultlines and the quality of accounting information.It breaks through the traditional "input-output"research model and deepens the understanding of the internal mechanism of the board.This paper is divided into six parts:the first part is introduction;This part first clarifies the background of the low quality of accounting information in China and the shortcomings of the diversity of board,and further illustrates the research significance,research methods,structural content and innovative points of this paper on the basis of the research background.The second part is literature review.This part reviews the literature on the faultlines of the board,the efforts of the board,the internal governance of the company and the quality of accounting information.Finally,it evaluates and summarizes the literature.The third part is theoretical analysis and hypothesis.Based on the social identity theory,self-classification theory,the principal-agent theory and the theory of the high echelon team,this part explores the relationship between the board faultlines,the level of effort and the quality of accounting information,and puts forward the hypothesis of this study.The fourth part is research and design.Firstly,the data of listed companies on Shanghai and Shenzhen A-share motherboard from 2013 to 2017 are selected and processed,then the variables are explained,and the empirical model for research needs is constructed.The fifth part is empirical test.Firstly,this part carries on the basic descriptive statistics and correlation analysis of the variables in this paper,and then uses the data for regression analysis,and finally carries on the robustness test.The sixth part is conclusions and policy recommendations.In this part,firstly,the conclusions drawn from the empirical analysis of the fifth part are further explained,and on this basis,countermeasures and suggestions are provided.Finally,the shortcomings of this study and further prospects are put forward.The research finds that:(1)the stronger the board faultlines,the lower the quality of accounting information.(2)The stronger the board faultlines,the lower the effort level of the board.(3)The effort level plays an intermediary role between board faultlines and the quality of accounting information.By studying the mechanism of"board faultlines-board effort level-the quality of accounting information",this paper enriches the research on faultlines,which is more explanatory than heterogeneity.In the past,scholars mostly paid close attention to the impact of faultlines on group performance and other output results,but little research was done on the process of the impact.This paper introduces the mediating variable of effort level to analyze the relationship between the faultlines of board and the quality of accounting information more comprehensively and thoroughly.This study explores the composition and interaction of the board from a micro perspective.Many directors hold several positions at the same time,although to some extent,it will bring a lot of convenience to the enterprise,but after all,people’s time and energy are limited.All kinds of part-time jobs and positions will distract directors’ energies and make them unable to fully pay attention to the development of the enterprise,and the decision-making and supervision responsibilities of the enterprise cannot be fully fulfilled,which ultimately leads to the inefficient operation of the enterprise.The conclusion of this study will also help enterprises to reflect on the operation mechanism of the board,help enterprises clarify the relationship between the composition of the board and the quality of accounting information,let enterprises know what kind of combination of directors is conducive to supervising enterprises to better compile accounting information.This paper provides a basis for enterprises to select board members,and help enterprises optimize directors according to their own characteristics.