Study on Executive Equity Incentives and the Risk of Corporate Financial Fraud

Dongyan Hou

doi:10.54097/c27n9e84

Authors

Dongyan Hou

DOI:

https://doi.org/10.54097/c27n9e84

Keywords:

Management Equity Incentive, Risk of Financial Fraud, A-share Listed Companies, Fraud Tendency Prediction Model

Abstract

The equity incentive system aims to alleviate the principal-agent problem of enterprises, but it leads to the risk of financial fraud in its implementation. This paper studies the influence of management equity incentive on the financial fraud risk of enterprises, taking A-share listed enterprises from 2019 to 2023 as samples, combining normative and empirical analysis, and constructing a fraud tendency prediction model. It is found that equity incentive increases the probability of financial fraud, and the restricted stock model is more likely to cause financial fraud than the stock option model. The research provides policy suggestions for improving the equity incentive system and strengthening the early warning of financial fraud risks.

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References

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