Research On The Impact Of Executive Incentives On The Financial Restatement Of Listed Companies

High quality accounting information can help investors to reduce information asymmetry and help investors to supervise management behavior.However,the financial restatement of listed companies has brought great challenges to the quality of accounting information.On the one hand,the motive and reason of financial restatement is mainly to correct and make up for the previous financial report,on the other hand,executives manipulate earnings for their own interests.Financial restatement not only causes the investor to lose confidence,the stock price falls then causes the financing cost to rise,but also reduces the market allocation resources efficiency.In recent years,the phenomenon of financial restatement of listed companies is increasing day by day,and the research on financial restatement is becoming more and more in-depth.The occurrence of financial restatement will be affected by many factors,but executive incentive is the main factor leading to the occurrence of financial restatement.Based on the information mismatch theory and the principal-agent theory,the senior managers of listed companies are the actual controllers of the companies,who play an important role in the authenticity and legality of financial reports.So for the executive’s equity incentive and compensation incentive size,what kind of impact on the company’s financial restatement,is the focus of this paper.Therefore,this paper chooses the equity incentive and compensation incentive as the agent variable of the executive incentive,adopts the Logit model to empirically test the impact of the executive incentive on financial restatement and the regulatory effect of internal control and audit quality.It is found that:(1)There is a positive correlation between equity incentives and financial restatement,and there is a negative correlation between compensation incentives and financial restatement;(2)Internal control helps curb the promotive effect of equity incentives on financial restatement,and helps to strengthen the inhibitory effect of compensation incentives on financial restatement;(3)Audit quality inhibits the promotive effect of equity incentives on financial restatement,and helps to strengthen the inhibitory effect of compensation incentives on financial restatement;in further research,it is found that:(4)Compared with state-owned enterprises,the impact of executive incentives on financial restatement is more significant in non-state-owned enterprises;and(5)Executive incentives and financial restatement affect the growth and commercial credit financing of listed companies.This study supplements the theory of financial restatement,encourages executives to fulfill their responsibilities,improves the quality of accounting information,and helps investors and other stakeholders make economic decisions.At the same time,it will play an important role in improving the internal governance structure of listed companies,improving the financial restatement system and even the long-term healthy development of market economy.