Research On The Impact Of CFO Serving As A Board Secretary On The Corporate Violations

With the rapid development of China’s economy,the number and market value of listed companies keeps growing,but at the same time,the number of listed companies engaging in violations is always high in China,the illegal behavior of listed companies has always been a problem that Chinese regulatory authorities attach great importance to,such violations will not only damage the rights and interests of stakeholders,but also go against the steady and healthy development of China’s capital market.Therefore,the research on the influencing factors of corporate violations is helpful to regulate the operation behavior of listed companies and provide a healthy and stable environment for participants in the capital market.While,the control of corporate violations mainly depends on internal and external governance mechanisms,the board secretary system is an important part of the governance structure of listed companies,in recent years,in order to implement the relevant policies of regulatory authorities,more and more listed companies choose CFO to serve as secretary of the board of directors.The CFO serving as a board secretary plays an important role in supervising the compliance operation of listed companies,strengthening the construction of internal control and improving the quality of information,thus helping to restrain the violations of listed companies.Based on the data of Chinese A-share listed companies from 2010 to2019,this paper studies the influence and mechanism of CFO serving as a board secretary on corporate violations.The results show that :(1)the role of CFO as a board secretary can significantly inhibit corporate violations;(2)By distinguishing the property rights,we find that the inhibiting effect of CFO serving as a board secretary is significant in non-state-owned enterprises;(3)In enterprises with low media attention,the role of CFO as a board secretary can significantly inhibit corporate violations;(4)In the heterogeneity analysis,the inhibiting effect of CFO serving as a board secretary on corporate violations is more significant in the companies audited by non-Big Four accounting firms and the CFO is younger.Moreover,CFO serving as a board secretary has a significant governance effect on financial violations and information disclosure violations,but has no significant effect on other violations.(5)In the analysis of mechanism,CFO serving as a board secretary can reduce agency cost and improve the quality of internal control,thus restraining the occurrence of violations.The research of this paper is helpful for the regulatory authorities and listed companies to understand the positive role of the CFO concurrent secretary system,which provides the theoretical basis for the listed companies and regulatory authorities to govern and prevent corporate violations,and helps to strengthen the control of listed companies’ violations,so as to maintain the good operation of the capital market.