Audit Governance,Executive Corruption And Capital Allocation Efficiency

Audit governance,executive corruption and capital allocation efficiency has become a hot research topic in theory and practice gradually.On the one hand,over the past 30 years,Chinese economy has maintained rapid growth,and China is one of the fastest growing economies,on the other hand,in more than 170 countries,China topped the global ranking of corruption around 80.When the administrative corruption spread to business,corruption is often seen as detrimental to economic growth(Jiang and Nie,2014),but how to explain this "the mystery of Chinese growth" ?Whether the government be able to supervise the management of the increasing power?Can state audit compensate for deficiencies in order to play a good external audit governance effects? What is the role of the quality and nature of government property between state audit and executive corruption? On the nature executive corruption is a kind of power rent,can the rent affect the efficiency of capital allocation?Can CPAs effectively detect and reveal corruption of senior management? If the answer to the above question is yes,then is this social audit supervision and control the current effect or hysteresis effect? What is the role of separation of ownership and transparency of information in social audit and corruption? Can the role of social audit affect the current period or future financing costs and investment efficiency?Can audit committee and board effectively reveal corruption of senior executives?Whether can the number of the internal audit department,responsibilities,membership and the board of diligence control corruption? Compensation Regulation and the political connection play what role? Can corruption affect executive agency costs,thus affecting the efficiency of capital allocation of listed companies equity financing costs,investment efficiency? These problems need to be addressed urgently both in theoretical and empirical method.In this paper,I use the theory of accountability and balance of powers theory as a starting point,sum up the literature of government audit,social audit,internal audit,executive corruption and other capital allocation efficiency theory by theoretical induction,normative analysis,the actual investigation,analysis of questionnaires and empirical research methods.With the goal of three audit functions together organically,analyze their internal mechanisms,based on the target of a coordinated management to study the relationship between audit governance,executives corruption and capital allocation efficiency.This paper use the audit data,and collect the data of employment auditors,the internal audit department staff,responsibilities,and membership of the audit committee diligence,capital allocation efficiency,corporate governance and financial indicators,explores the relationship between state audit governance,corruption and capital allocation efficiency,examine governance,corruption and the capital allocation efficiency,and internal audit governance,corruption and the efficiency of capital allocation.The paper analyze the quality of government regulation of property rights and the nature of the government audit executives and corruption,explore the role of information and transparency in the degree of separation of ownership and the relationship between the political relevance of the internal audit executives and corruption,a senior research on agency cost impact of corruption on increasing efficiency of capital allocation.Through the above research,this paper point to give the following conclusions:(1)The higher state audit governance is,corruption is more likely to be exposed,further studies have shown that in terms of state audit to identify the problems,penalties and the transfer of personnel executives corruption played a good role in exposing and punishing corruption;the higher the level of social audit of governance,the greater the probability of executives of listed companies corruption is uncovered;the higher the listed company's internal audit management level,executives of listed companies is revealed corruption possibilities,the greater the probability with segmentation variable internal audit independence,the internal audit function and the audit committee to enhance the degree of diligence,listed company executives corruption is more likely to be exposed.(2)In the region of poor quality of government,the role of government audit is stronger;transparency play a negative regulatory role between social audit and executives corruption;social audits is more significant in the listed companies with government,military,the NPC or CPPCC background,the internal audit effectively reveal corruption executives of the company.(3)Empirical evidences suggest that the higher the lag of non-standard audit opinions rate,the lower the probability of the current listed company executives corruption,social auditing of listed company executives at the same time reveal corruption.State audit,social audit and internal audit in future periods executives can not constitute an effective deterrent and warning.(4)Empirical studies have found that corrupt executives of listed companies increase the cost of equity financing,reduce the efficiency of capital allocation,damage the efficiency of capital allocation;along with executives to enhance the probability of occurrence of corruption,corporate agency costs significantly increased,resulting in increased corporate financing costs and investment efficiency.(5)The current social audit on executive governance role lag effect,the economic consequences will not be able to occur in the current in financing and investment stage,but by senior management corruption in order to have a positive impact in the future of the financial year for capital allocation efficiency.Based on empirical research issues,I propose recommendations to build hybrid state audit system,to newly established "one Committee and one Court," the Audit Oversight Board and the Supreme Court of Audit Integrity.The innovation of this paper in the following four areas:(1)An empirical study make an incremental contribution to the governance literature.Discussion on the quality of government and the nature of the property in the national audit and executive corruption,it provides empirical evidence and empirical support.(2)Explore the mechanisms of governance audit,executive corruption,the internal mechanism of capital allocation efficiency.The paper is a supplementary to the literature of executives corruption its configuration efficiency of economic consequences.(3)Study the impact of capital allocation efficiency path,on the basis of existing literature only implicit inducement system corruption and business performance consequences,the paper enrich impact on the agency cost of capital allocation efficiency.(4)Based on the goal of a unified executives corruption audit theoretical framework,provide innovative policy proposals to build a hybrid national audit system.In this paper,I establish a theoretical framework for the audit,social audit and internal audit system incorporated into a large national audit system.