Internal Control Deficiencies,Religion And Executive Corruption

Combating corruption and advocating honesty has always been the focus of the government and the people.In recent years,corruption,bribery and extravagant consumption among senior executives of listed companies have emerged endlessly,which not only results in mismatch of enterprise resources,reduced efficiency and hindered development,but also affects the effective operation of market mechanism and becomes a stumbling block to social economic growth.Identifying the causes of corruption and effectively curbing executive corruption is an important issue that needs to be addressed urgently.Studies have shown that high-quality internal controls can help reduce the incidence of corruption,while internal control deficiencies mean that there are design loopholes in the internal control of a company that can not prevent errors in advance or can not quickly detect and correct the deviations of these errors,which are loopholes in the design and implementation of internal control system.So,will internal control deficiencies lead to executive corruption? On the other hand,when the existing literature measures the impact of the system on corporate governance,most of them rarely consider the application effects of informal institutions such as religion,nor do they pay attention to the link between religion and the corrupt behavior of corporate executives.Based on literature review and theoretical induction,this paper selects non-financial A-share listed companies from 2010 to 2017 as samples to distinguish between explicit corruption and implicit corruption,and empirically tests the relationship between internal control deficiencies and two types of executive corruption,as well as the influence of religious traditions.The study found that:(1)Under certain conditions,listed companies with more serious internal control deficiencies are more likely to have executive corruption;(2)Under certain conditions,the regions with a stronger religious atmosphere have a lower probability of corruption among executives of listed companies;(3)The religious atmosphere around the company's office space can effectively mitigate the corruption caused by internal control deficiencies.The above conclusion can hold in both explicit corruption and implicitcorruption.In addition,this paper also takes the case of ZHENGZHOU COAL&ELECTRIC CO.LTD as an example to further explain the induction effect of internal control deficiencies and the adjustment effect of religion,so as to enrich the research content.Under the background of anti-corruption,The results of this paper are helpful to analyze the influencing factors and mechanism of executive corruption from the perspective of system:when the design or operation of the formal system is biased and defects or loopholes occur,the chances of corruption increase,leading to an increase in the probability of corruption.As an informal system,religion also restricts individuals and reduces corrupt behaviors by suppressing corrupt motives.This paper enriches the research on the economic consequences caused by internal control defects,and sounds the alarm for companies that have not paid much attention to the construction of internal control systems.On the other hand,based on the national conditions of the country,this study uses Chinese characteristics such as Buddhism and Taoism,and using cases to further illustrate the application of religion in preventing corruption.This paper increases the perspective of informal institutions,broadens the research results of religious traditions that influence behavior choices to a certain extent,,and has a certain borrowing for realizing the "play of the positive role of religious people in promoting economic and social development" proposed by the Party Central Committee.