Correlation Analysis Between Executive Characteristics And The Quality Of Internal Control

In recent years,the emergence of a series of financial fraud cases in China's capital market has brought serious harm to the interests of investors,and effective internal control can prevent the risk,so the strengthening of internal control is paid more attention,the government have also promulgated relevant laws to strengthen it.The construction of good internal control system needs the work of the management team,and the executives' values and cognitive ability will influence the behavior of executives.The article distinguishes the different property rights of enterprises into the two to research the relationship between executive characteristics and the quality of internal control,in order to provide recommendations that optimize the corporate executive team and improve the quality of internal control.This article first reviews the domestic and external relevant literature,and then determines the research direction.Secondly,the article defines the concept of executive and executive characteristics according to the relevant theoretical analysis of the existing and authoritative literature,then it summarizes the internal control and its quality,and selects the measuring standard of internal control quality.Finally,it put forward the hypothesis of this article from the two dimensions that are the average level and heterogeneity of the executive characteristics of age,education and tenure,and compared the influence of different property rights on the relationship between the two.According to the analysis of the related theories,it regards total 1515 companies from 2012 to 2014 as the research sample,then it established the regression model to verify the proposed hypothesis according to the regression results.Finally,it draw the conclusion of the article and put forward the relevant policy recommendations in order to better improve the quality of internal control of enterprises.Research results show that corporate executives with increase of age is more likely to avoid risk,and they in state holding enterprises with increased age facing retirement and political promotion is even more,so executives will pay more attention to the internal control.With increase of TMT tenure,corporate executives understand the external conditions and internal environment more quickly,the quality of internal control can get more security,compared with the state-owned holding enterprises executives,executives of non-state-owned enterprises with the extension of the term is in order to maximize the profits to the enterprise while avoiding the risk so as not to bring more losses to the enterprise,so it will pay more attention to the internal control.With the increase of executive education,they can make a more rapid response to changing new things and the environment,so the internal control can be more perfect.Compared with the non-state holding enterprises,the managers of the state-owned holding enterprises are basically appointed or designated by the government,they are required a higher hardware requirements,and more sensitive to the laws and regulations,so the requirement in the establishment of internal control system are more stringent.Executives are more likely to have the same experience and similar values with executive team smaller difference,it is easier for each other to make a consistent decision,therefore,the internal control system constructed by the senior management team with small heterogeneity is more perfect.The influence of the quality of internal control with very small age heterogeneity is not significant,and in the state-owned holding company it is the ability not the age that is more important,so the age heterogeneity influence in the internal control quality is not significant.There is strict mechanism of state-owned enterprises in the executive office,the executive turnover frequency in state-owned enterprises is relatively low,so the executive team of the state holding enterprise has the same cognition,and is more conducive to the construction of internal control system.Strict executive selection and promotion system of state-owned enterprises make the education level of executives more balanced,the educational background of executives are similar,they are more easy to reach agreement in establishing the system of internal control.Based on the regression analysis,the following recommendations for the optimization of the executive team are put forward:(1)to keep the executive team age and age structure reasonable;(2)selecting highly educated personnel and reducing the differences in the level of education among the team members;(3)appropriately prolonging executive tenure and reducing the replacement of the executive frequently.