Study On The Relationship Between The Executive Incentive And Effectiveness Of Internal Control In Listed Companies Of China

The internal control system of the enterprise is the basis of the reliability of accounting information in the capital market,and provides the basic guarantee for the healthy operation of the listed company.In recent years,the failure of internal control of the case of endless,seriously affected the confidence of investors in the reliability of corporate financial reporting.Listed companies executives as the internal control of the design and operation of the main,must be responsible for its effectiveness.Based on the principal-agent theory,in order to solve the conflict between managers and shareholders,reduce agency costs and reduce moral hazard,enterprises must guide managers to actively develop and implement effective internal control system through incentive mechanism.This article selected from 2012 to 2015,Shanghai and Shenzhen listed all the A-share listed companies as a research sample.According to the different structure of property rights,this paper studies the relationship between executive incentive mechanism(including material incentive and political incentive)and the effectiveness of internal control through descriptive statistics,correlation analysis and regression analysis in state-owned enterprises and private enterprises.Combined with empirical results and related theoretical analysis,make relevant policy recommendations to improve the level of internal control effectiveness and improve the incentive mechanism.The main conclusions are:(1)Incentive mechanism for different ownership structure has different effects.Executive incentive and equity incentives can significantly improve the effectiveness of the level of internal control in private enterprises,but in the state-owned enterprises,salary incentive in the general manager can improve the effectiveness of internal control,but the effect of equity incentive is not;On the contrary,the chairman of the board,the role of equity incentive is more significant than pay incentive.Political incentives can not improve the effectiveness of internal control,but will weaken the effectiveness of the material incentives to improve internal control,which provides a new basis for the negative effects of political incentives.(2)In the state-owned enterprises,the improvement of the effectiveness of internal control has a positive effect on the return of the general manager,but it has no significant impact on the share of the general manager's stake and whether they can be promoted.The main influencing factors of executive promotion are political background.This will provide the basis for the future that put the effectiveness of internal control into the promotion criteria for senior management promotion.(3)In the private sector executives,having a political background can bring better financing facilities.