Companies on corporate governance of financial analysis system

[Paper Keywords] Corporate Governance: Listed companies, financial analysis and new ownership structure
[Abstract] establishment of a standardized corporate governance structure, and select the appropriate long-term development of the financial analysis system, bring its financial management function is the core of modern enterprise system. This paper describes the meaning of corporate governance and corporate financial analysis system and the relationship between of modern corporate governance system in China under the status of corporate financial analysis and the resulting level of corporate governance in the status quo analysis of the causes and some suggestions for the status quo and discussed.


First, the Corporate Governance and the relevance of financial analysis system
Corporate governance usually includes three aspects: First, the configuration of control right and the sharing arrangements, and second, the board of directors, managers and workers, monitoring and performance evaluation, third is the design and implementation of incentive programs (Qian Yingyi, 1995). Because business is a contractual relationship, connection, is a legal fiction (Jensen and Meckling, 1976), corporate governance and control in the residual claim-sharing arrangement between the two implemented. corporate governance and effective financial analysis system the correlation can be reflected in corporate governance and financial governance relationship between the above, as shown in Figure 1.


(A) improve corporate governance, corporate financial analysis system is the basis and prerequisite for
Enterprises to establish the purpose of financial analysis system is constantly improving their financial management, and corporate governance, financial governance is a prerequisite and theoretical basis, under the theory of corporate governance arising from the separation of ownership and management company, and the resulting principal-agent theory , asymmetric information theory is between the owners and managers, between managers at different levels in the company of property possession, use, disposal, supervision and control of the remaining terms of distribution and the theory of checks and balances, which is the prerequisite for generating financial governance theory and the foundation.

(B) the degree of perfection of corporate governance restricts the quality of accounting information
The role of financial governance in the financial accounting and then meet the regulatory requirements of production and disclosure of financial accounting information for all involved in the main corporate governance they need to provide an important source of information, reduces information asymmetry, making the corporate governance to function effectively. meet the regulatory requirements of financial accounting information on the one hand with its reflection of the functions of the enterprise's financial position, operating results and cash flow information revealed to investors and creditors and other information users provide guidance related decisions correctly. On the other hand, financial analysis system, the information revealed, but also reflects the operators of the fulfillment of fiduciary duty, is to evaluate the performance of operators based on the real operators, objective evaluation may help reduce moral hazard and improve the role of incentives.

(C) the effectiveness of financial analysis system is to build an effective way to improve corporate governance
Corporate governance theory about the realization of the right residual claim and control by financial power distribution among stakeholders of the main changes implemented, and different configurations will produce different property right "incentives" and "opportunity system" and Corporation Governance they are completely dependent on the level of incentive and monitoring mechanisms for efficiency, and financial analysis of the content including the company incentives and the efficiency of governance monitoring mechanism, so well-constructed financial analysis system is an effective means to improve corporate governance.

Second, the level of corporate governance, corporate financial analysis system and Genetic Analysis
(A) the current focus of the financial analysis system is limited, the lack of analysis of corporate governance
First, the current emphasis on financial analysis system in China is still the expert analysis functions, hard to say the goal is the pursuit of corporate value creation or to the interests of all stakeholders to maximize the objective, the focus has not shifted the company's effective governance and corporate value. Secondly, the current system artificially cut the financial and corporate governance, despite the current financial and operational analysis system includes two areas, but the focus is often on business issues than on the evaluation of operating efficiency , and this assessment is the goal and the company value creation, corporate strategy, resource allocation, performance measurement, and the divorce of corporate governance. reposted elsewhere in the Research Papers Download http://www.hi138.com (b) of the current financial system of information disclosure timeliness and relevance of high sensitivity
2009 average of 62.65 disclosure index, reliability, relevance and timeliness of the index upward after 2007. From 2005 to 2009, disclosure index, reliability, relevance and timeliness of the terms of the changes , and timely information disclosure of listed companies and relevant changes in the sensitivity of the economic environment is very strong, and when the momentum of a good economic environment, the listed company may choose to disclose information earlier, and the information disclosed related to high, when the economic environment changes tends to bottom, the disclosure of information in a timely manner is reduced, while the relevance of the disclosure of information reduce the information disclosed by listed companies is relatively stable reliability of these, the sensitivity of the weak economic environment.

Third, based on the company's corporate governance system of financial analysis Suggestions
(A) innovative accounting management system
The shortcomings of traditional accounting management system gradually, mainly in: accounting regulatory body on accounting control out of control, accounting control objectives can not be achieved, basic work is weak, weakened oversight function. Thus, the traditional accounting management system has an impact on corporate governance to achieve the objective an important factor and must be innovative.

(B) improve the corporate governance structure in order to reduce the status of financial fraud
Establish a standard, sound and effective internal governance structures and mechanisms, one optimizing equity structure, the establishment of checks and balances over shareholders to prevent the major shareholder "empty" behavior. The second is to improve the board structure, the accumulation of the stock system and the introduction of a mandatory online voting system, strengthen the obligations and responsibilities of directors and severely punish the abuse of company directors and senior management of property, the behavior of the transfer of shareholder wealth. Third is to strengthen the independence of independent directors to reform independent director to receive unpaid pay channels for independent director can independent opinion on the financial report. Fourth, the coordination between independent directors and supervisors to strengthen the obligations and responsibilities of supervisors, supervisors play a supervisory function over financial reporting.

(C) strengthening corporate governance mechanism of external supervision and restraint on the role of financial reporting
First, the reform of listed companies audit system, specifically require listed companies to unity by the Audit Committee through the tender selection agency, while actively promoting forensic accounting system, strengthen the independence of the independent audit. Second, changes in the securities market financing capabilities, to optimize resource allocation promote the transformation of scientific and technological innovation, changing the administration of the oversight body management, to review, mandatory information disclosure and strengthen the investigation, the case against illegal market regulatory model transition. Third, to establish a strong deterrent and civil civil compensation mechanism mechanism as the center of the legal system of investor protection, increase the cost of financial reporting fraud. Fourth, to strengthen social media, public opinion, reform and restructuring of the news media reported on the public company or person the burden of proof and standard of proof, give full play to "fourth power" supervisory role. Fifth, improve the external market mechanisms, improve the market for corporate financial reporting binding. Links http://www.hi138.com Research Papers Download