Research On The Influence Of The Backgroundcharacteristics Of Top Management Team On Internal Control Effectiveness

Internal control is a guarantee mechanism for enterprises to prevent management failure and plays an important role in the effective operation and healthy development of the capital market.A sound and effective internal control is conducive to avoiding and controlling risks in the activities of production and operation,rationally regulating the management system and improving the ability of continuous operation.As the highest level of human capital,the top management team plays a role of decision-making,and plays a decisive role in the management and development strategies of the company.The high-level echelon theory points out that the background characteristics of top management team can represent the psychological characteristics,such as moral concept,cognitive ability,risk awareness,management style,and affect the internal operations and major decisions of enterprises.Based on this,this paper argues that there is a certain connection with the background characteristics of top management team and internal control effectiveness.At present,the academic community mostly studies the impact of internal control on the dominant macro factors of the company's overall macro-level.In recent years,academic circles have begun to study the hidden soft factors from the micro level of individuals.However,the business decisions of enterprises are made by the team,rather than individual decisions.The board of directors,the board of supervisors and the management layer respectively play the role of leading,supervising and organizing in the construction of internal control system.Therefore,from the perspective of the characteristics of top management team,this paper explores the effect of the background characteristics of top management team on the internal control effectiveness.Furthermore,this paper distinguishes the different property rights of enterprises into the two to research the influence of background characteristics of top management team on internal control effectiveness.This paper first introduces the research background,significance,ideas,methods and possible innovation points.Then based on the relevant literature,this paper summarizes the commonness and room for improvement of current research.Again,after defining the related concepts,this paper combines with the related theoretical basis,analyses the mechanism of action about how the background of top management team characteristics influence the internal control effectiveness along the path of "background characteristics of top management team--psychological characteristics of top management team--internal control effectiveness",puts forward the corresponding research hypothesis,and selects Shanghai and shenzhen a-share listed companies from 2012 to 2016 as research samples.After defining the relevant variables and establishing the empirical model,we use regression analysis method to empirical test.The research shows that:(1)The higher the average age of the top management team is,the higher the internal control effectiveness of the enterprise is,and the extent to which in state-owned enterprises is stronger than non-state-owned enterprises.(2)The higher the average education level of the top management team is,the higher the internal control effectiveness of the enterprise is,and the extent to which in state-owned enterprises is stronger than non-state-owned enterprises.(3)The tenure of the top management team is positively correlated with the internal control effectiveness,and the extent of its role is weaker in state-owned enterprises than that of non-state-owned enterprises.(4)The financial background of the top management team can improve internal control effectiveness,and the extent to which in state-owned enterprises is weaker than non-state-owned enterprises.(5)The academic background of top management team can improve internal control effectiveness,and the extent to which in state-owned enterprises is weaker than non-state-owned enterprises.(6)The female proportion of top management team is positively correlated with internal control effectiveness,but it is not significant.Finally,based on the research results,this paper puts forward some suggestions on how to build a reasonable top management team,optimize the training and selection mechanism of top management team,and promote the internal control construction of enterprise.