Kuang: Determinants of Internal and External Corporate Governance Predictors of Operational Risk of Fraud of China's State Owned Enterprises

ABSTRACT:

This paper attempts to estimate the impact of four factors on corporate fraud rate using panel data of China’s State Owned Enterprises. The sample period is 2010-2012. We extract company information from annual reports of 60 State Owned Enterprises. We found strong evidence that independence of board members is negatively correlated to the number of fraudulent cases. The other three variables – Relation Base ,Executive Board and Educational level – are positively correlated.

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