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Audit committee, board characteristics and quality of fi nancial reporting: An empirical research on Chinese securities market
WU Qinghua, YIN Junming, WANG Pingxin
Front. Bus. Res. China. 2007, 1 (3): 385-400.
https://doi.org/10.1007/s11782-007-0023-y
Board independence and the board’s expertise characteristics are key factors influencing the quality of financial reporting. Companies, having a higher percentage of independent directors, having independent financial directors, or having an audit committee on board are more likely to generate quality accounting earnings information. Variables representing board behavior characteristics, namely, ratio of shares owned by the board, board meeting frequency within a year, and the number of independent directors holding posts concurrently in the controlling shareholder s company, are not significantly related to the quality of financial reporting. Board meeting frequency is even abnormally negatively related to the quality of financial reporting.
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Non-circulating equity and excessive equity fi nancing
ZHENG Zuxuan, ZHOU Ye, LI Da, ZHAO Tao
Front. Bus. Res. China. 2007, 1 (3): 422-436.
https://doi.org/10.1007/s11782-007-0025-9
In the Chinese stock market, the price of exchangeable stock is determined by the discounted future uncertain cash flow, while the price of non-circulating stock depends on per book value. In general, because investors holding non-circulating equity maintain the control power, corporate finance and investment decisions reflect their interests. The pricing mechanism of non-circulating stock violates the basic pricing principle of the capital market. Therefore, corporate finance decisions deviate from the NPV (net present value). As a result, excessive equity financing problems would occur in the listed companies.
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An analysis of the characteristics of Chinese listed companies’ independent director system
TAN Jinsong, LI Minyi, LI Wenjing, ZHENG Heng, WU Jianlin, LIANG Yu
Front. Bus. Res. China. 2007, 1 (3): 456-481.
https://doi.org/10.1007/s11782-007-0027-7
From three different perspectives, namely, the basic characteristics of independent directors, the percentage of independent directors on board and its relation to company performance, and the remuneration for independent directors and its relation to company performance, we could summarize implementation characteristics of the independent director institution in China: the age distribution of independent directors is relatively even and the majority of them are academic staff and researchers with business administration backgrounds; a positive relationship between the independent director s remuneration and company performance, as well as between the number of independent directors on board and the company performance.
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