Managerial Self-interested Behavior And Effectiveness Of Internal Control

Since the early 2000s, it occurred that Enron, WorldCom and other large companies have financial fraud,the research and construction of internal control has become the focus of domestic and international theory and practice community. The world-wide scholars major in the construction of internal control,the disclosure of internal control deficiencies, the evaluation and influencing factors of internal control quality and internal control effectiveness, and they study the effectiveness of internal control from the perspective of the company characteristics and the corporate governance more than from the perspective of managerial behaviors, psychology. In recent years, scholars have applied science, psychology and other research results to the study of economics and business management, such as forms and economic effects of managerial self-interested behavior, but the effectiveness of managerial self-interested behavior and internal control is not involved. Therefore, how the main characterization of managerial self-interested behavior affects the effectiveness of internal control? Whether These effects vary from the nature of property or not? All the above are the main contents of the dissertation.In this paper, normative and empirical research methods are adopted, firstly, it introduces the research background,the research significance, the main content and the main innovations; Secondly, it concerns about managerial self-interested behavior, the theory of internal control and the related articles,and lays the foundation for the empirical test below;thirdly,the effective mechanism of managerial self-interested behaviors is introduced,and elaborates proposed hypothesis of this paper, this paper selects the effectiveness metrics of managerial self-interested behavior and internal control, and builds regression models; fourthly,based on the listed companies in A-Share market of Shanghai and Shenzhen Stock Exchange(observation period between 2008-2012),empirical research inspects managerial self-interested behavior effect on internal control. The main contribution of this paper has the following two aspects:1. The managerial self-interested behavior of many listed companies of China has adverse influence on the effectiveness of internal control. Firstly, managerial self-interested behavior on the job consumption has absolute negative effects on the internal control, the more serious behavior is, the lower level the effectiveness of internal control has; Secondly, the behavior of managerial over-investment and the effectiveness of internal control are significantly negatively correlated, the higher the degree of over-investment in the company is, the lower level the effectiveness of internal control has.2.As for the different companies which own the different nature of property rights, managerial self-interested behavior can inhibit the effectiveness of internal control, but the influence between the managerial self-interested behavior of the different nature of property rights and the effectiveness of the internal control effect is different; Compared with State-owned companies, managerial self-interested behavior of non-state-owned companies has more significant impact on the effectiveness of internal control.