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1 – 4 of 4Yuedong Li, Xianbing Liu and Qing Yan
The purpose of this paper is to discuss whether top management will assume their liabilities especially when financial restatement occurs, and,based on the “effective supervision…
Abstract
Purpose
The purpose of this paper is to discuss whether top management will assume their liabilities especially when financial restatement occurs, and,based on the “effective supervision theory” and “strategic cooperation theory,” to examine whether an institutional investor is a supervisor or a cooperator considering the management turnover caused by financial restatement in the companies.
Design/methodology/approach
Using a sample of the A-share-listed companies from year 2010 to year 2014 and dividing financial restatement into fraudulent financial restatement and other financial restatement, the authors examine the relationship between financial restatement and abnormal management turnover, which usually is related to the management integrity or capacity. By using group test methods, the authors test the influence of the institutional investors’ shareholding on the relation between financial restatements and management turnover.
Findings
This paper finds that financial restatement can result in abnormal management turnover, especially the fraudulent financial restatement. The institutional investors usually are supervisors but when the shareholding of institutional investor is too high and the management turnover results from fraudulent financial restatement, the institutional investors may become cooperators with management in the companies. Besides, the institutional investors play the supervisory function more significantly in non-state-owned enterprises.
Originality/value
This paper expands literature of the institutional investors in the corporate governance area and provides a basis for future research in the area of the institutional investors’ governance effect. It divides financial restatements into fraudulent financial restatement and other financial restatement and examines the relationship between financial restatement and abnormal management turnover so as to provide evidence about whether the management will assume their responsibilities when there is financial restatement in the company. It also tests whether the institutional investors will play supervisor’s or cooperator’s function in state-owned and non-state-owned enterprises.
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Yuedong Li, Anna M. Rose, Jacob M. Rose and Fengchun Tang
This study examines the effects of incentive compensation and guanxi, a type of informal personal relationship between people, on the objectivity of Chinese internal auditors…
Abstract
Purpose
This study examines the effects of incentive compensation and guanxi, a type of informal personal relationship between people, on the objectivity of Chinese internal auditors. Given that the objectivity of internal auditors is essential for promoting financial reporting quality, it is important to investigate the effectiveness of internal audit functions, especially in emerging markets where the corporate governance mechanisms designed to promote objectivity are less mature.
Methodology/Approach
The research employs a 2 × 2 between participants experiment with 116 graduate accounting student participants.
Findings
After controlling for internal auditors’ ethicality, we find that close-guanxi between management and internal auditors and incentive compensation in the form of bonuses based upon meeting earnings targets both have the capacity to impair the objectivity of Chinese internal auditors. Participants were more tolerant of management’s attempts to manage earnings when there was close guanxi or bonus compensation. Further, compensation structure only influenced internal auditors’ support of management when guanxi was distant, but when there was close guanxi between internal auditors and management, internal auditors were unlikely to challenge management regardless of the compensation structure.
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Yuhan Tang, Yuedong Wang, Jiayu Liu, Boya Tian, Qi Dong, Ziwei He and Jiayi Wen
In order to extend the application of the original octagonal Goodman–Smith fatigue limit diagram, which is commonly used for the evaluation of structure fatigue stress in…
Abstract
Purpose
In order to extend the application of the original octagonal Goodman–Smith fatigue limit diagram, which is commonly used for the evaluation of structure fatigue stress in engineering, a modification of it is proposed for the structure made of S355 steel (commonly used in high-speed electric multiple units (EMUs) bogie frame).
Design/methodology/approach
The modification is made based on Deutscher Verband für Schweißen und verwandte Verfahren e. V. (DVS) 1612 standard and the γ-P-S-N curve, with consideration of the fatigue evaluation requirements of different survival rates and confidence levels. The verification of the modification is performed for three welded joints and for the comparison with the experimental data.
Findings
The results indicate that the design survival rate, the design safety margin and the fatigue stress evaluation of welded joint types are all improved by using the modified diagram.
Originality/value
There are relatively few studies on modifying octagonal Goodman–Smith fatigue limit diagram. In this paper, a modified diagram is proposed and applied in order to ensure the safety and durability of key welded structures of rail vehicles.
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