Delisting pressure, executive compensation, and corporate fraud: Evidence from China

Zhou, Fangzhao; Zhang, Zenan; Yang, Jun; Su, Yunpeng; An, Yunbi

doi:10.1016/j.pacfin.2018.01.003

Cited by 74 publications

(44 citation statements)

References 39 publications

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“…Due to they are considered consistently strengthen the company's internal control, it means minimizing the occurrence of fraud in the company's financial statements. Zhou et al, (2018), released the Chinese capital market by finding that CEOs and financial directors who relatively received low income tended to commit fraud, with or without the pressure of delisting companies in the capital market. Furthermore, Golden et al, (2011), stated a very large bonus or incentive can trigger greed or fear of losing the position of the executives of the company.…”

Section: Literature Review and Hypothesismentioning

confidence: 99%

Fraud factors of financial statements on construction industry in Indonesia stock exchange

Pramana

Suprasto

Putri

et al. 2019

ijssh

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This research was intended at analyzing the fraud factors of the financial statement using the fraud triangle theory approach. Financial statements manipulation was a fraud form. It was generally difficult to detect. The population was all companies engaged in the construction industry sector. They were listed on the Indonesia Stock Exchange in 2013-2017. The multiple regression is applied for the determination of the sample using purposive sampling techniques and data analysis techniques. The statistical test results showed the opportunity proxied by the audit committee illustrates the effectiveness of the control. It has been negatively affecting the fraudulent financial statements. The rationalization proxied by the auditor’s change has a positive effect on the fraudulent financial statements. This study also contributed to the fraud triangle theory. It was provided evidence that elements in the fraud triangle model. They can be used to detect fraudulent financial statements.

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Section: Literature Review and Hypothesismentioning

confidence: 99%

Fraud factors of financial statements on construction industry in Indonesia stock exchange

Pramana

Suprasto

Putri

et al. 2019

ijssh

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show abstract

“…Zou, Zhang, Yang, Su found that pressure contributed positively to the occurrence of fraud [18]. The study also found that CEOs and CFOs with relatively lower fees tended to commit to fraud.…”

Section: A Pressurementioning

confidence: 79%

Are The Model of Fraud Triangle Elements Sufficient Enough to Prevent Fraud?: Evidence In North Sumatra Province

Simbolon¹,

Ahmad²,

Elviani³

2019

Proceedings of the 1st International Conference on Social Sciences and Interdisciplinary Studies (ICSSIS 2018)

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Fraud triangle is the three element that cause fraud. Pressure, opportunity and rationalization are dimensions of fraud triangle. This study aims to investigate the effect of fraud triangle element and fraud. Data are collected from the responses of the questionnaires distributed to executive of the Government of North Sumatra Province. Data analyzedusing multiple regressions. This study found that the fraud triangle element did not affect the incident of fraud. An interesting finding was made that the fraud triangle elements are not enough to prevent fraud in North Sumatra Province. This study implies that there are other factors needed to prevent fraud in North Sumatra Province, such as integrity.

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“…Research carried out in other countries perpetuates themes, such as: 1. determinants of financial fraud and corporate governance (Yang et al, 2017); 2. ownership, governance and fraud structure in China (Chen, Firth, Gao, & Rui, 2006); 3. corporate fraud, systematic risk and shareholder enrichment (Cloninger & Waller, 2000); 4. closing pressure, executive compensation and corporate fraud in China (Zhou, Zhang, Yang, Su, & An, 2018); 5. corporate value governance in China (Cheng, Su, Yan, & Zhao, 2019), in the United States (Brown & Caylor, 2006;Bhagat & Bolton, 2019) and in the Gulf (Pillai & Al-Malkawi 2018).…”

Section: Theoretical Foundationsmentioning

confidence: 99%

“…Based on numerous corporate governance failures (Fich & Shivdasani, 2007), there is a consensus among authors that financial fraud leads to significant losses in valuation for investors (Zhou et al 2018). Fich and Shivdasani (2007), for example, studied, in the United States, companies facing shareholder class actions alleging financial misrepresentation based on the United States Securities and Exchange Commission Act of 1934.…”

Section: Irregularities and Governancementioning

confidence: 99%

Irregularities and the Market Value of Companies

Santos

Funchal

Nossa

2020

RAM, Rev. Adm. Mackenzie

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Purpose: To investigate the impact of the irregularities under analysis and/or judged in the sanctioning administrative proceedings of the Securities and Exchange Commission on the market value of Brazilian companies. Thus, we used the signaling theory to analyze how stakeholders interpret situations and where the available information is asymmetric and incomplete among market agents. Originality/value: The study was based on the assumption that the conviction within the scope of the regulatory body can negatively affect the company’s reputation and value. Empirical evidence indicates that irregularities affect market sentiment. On the other hand, the company can present a better market value if an effective and efficient corporate governance is established, aligning the interests of stakeholders and management. Design/methodology/approach: Information was collected with quarterly data covering the period from 2010 to 2018. Two hypotheses were tested by means of regression analysis in OLS with pooled data, panel - fixed effects and 2SLS. Findings: The results indicated that the irregularities, in the analyzed period, did not impact the companies’ market value in the estimation by MQ2E. We suggest to the chief executive officer (CEO) and the chief financial officer (CFO) that they assess the level of corporate governance of their companies and invest in the search for excellence since the best levels of governance bring a positive signal to the market. The CEO is advised to pay attention to the fact that good governance is not enough to keep companies from being irregular.

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Delisting pressure, executive compensation, and corporate fraud: Evidence from China

Cited by 74 publications

References 39 publications

Fraud factors of financial statements on construction industry in Indonesia stock exchange

Fraud factors of financial statements on construction industry in Indonesia stock exchange

Are The Model of Fraud Triangle Elements Sufficient Enough to Prevent Fraud?: Evidence In North Sumatra Province

Irregularities and the Market Value of Companies

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