Equity Incentive,the Nature Of Property Rights And The Effectiveness Of Internal Control

In recent years,the rules and regulations of internal control have been improving,but the status of internal control is still not optimistic.There are still many problems in the process of implementing of internal control.To improve the effectiveness of internal control,in addition to rely on rules and regulations and other external constraints,it is more important to fully mobilize the power within the enterprise.In the process of building and implementing the internal control system,executives play a very important role,and the enthusiasm of executives is very important to the effectiveness of internal control.Equity incentives combine the interests of executives with the interests of the company and are an important means of enhancing executive motivation.Therefore,this article will take the executive as the object of study and use the proportion granted to executives when the plan is announced of the total equity to describe the proportion of equity incentive,to explore the relationship between the equity incentive and the effectiveness of internal control.Considering that the state-owned enterprises and non-state-owned enterprises are in a different institutional environment,the result of the implementing equity incentives to executives of the state-owned enterprises and non-state-owned enterprises may be different.This paper will discuss the state-owned enterprises and non-state enterprises in the equity incentives separately.After combing the existing literatures,this paper expounds the possible relationship between equity incentive and the effectiveness of internal control on the theoretical by normative research method and put forward the hypothesis.Then,it use the empirical analysis method to further explore the relationship between equity incentive and the effectiveness of internal control.First of all,it analyzes the current situation of the effectiveness of equity incentive and internal control in China's A-share board and small and medium-sized board enterprises from 2010 to 2014,and then carries out 815 samples and their matching samples which are similar to the implementation of equity incentive sample in industry,company size,and concentration of equity but did not implement the equity incentive as a sample of descriptive statistics,T test,correlation analysis and regression analysis,and then draw the conclusion.According to the empirical results,the effectiveness of internal control of state-owned enterprises is better than that of non-state-owned enterprises.The effectiveness of internal control of enterprises which have implemented equity incentives is better than enterprises which have not implemented equity incentive.Whether in state-owned or non-state company,the higher the proportion of equity incentive granted,the better the effectiveness of internal control is.