The Correlation Between Background Characteristics Of Top Management And The Quality Of Internal Control

In 2008,The Ministry of Finance and other departments in China had released the Basic Norms of Internal Control,and the year of 2010,they released the Internal Control Guidelines.The Ministry of Finance and China SecuritiesRegulatory Commission released the Notice on the implementation of the standard system of internal control of main board listed companies in batches in 2012 in August,2012.The series of documents marks that the internal control information of Chinese enterprises has entered the stage of mandatory disclosure,and China's internal control information disclosure has entered a standardized era.As one of the important management methods of an enterprise,internal control plays an important role in the operation and management of an enterprise.The development and success of an enterprise cannot be separated from high-quality internal control.Scholars seldom studied the internal control quality of enterprises from the perspective of top management,especially the influence of the special background characteristics of top management on the internal control of enterprises.As the leader and manager of an enterprise,top management play a key role in the formulation and implementation of internal control activities.But different social backgrounds of top management differ greatly in cognitive ability,judgment ability,professional ability and personal preference,so they have different effects on internal control activities of enterprises.The paper studies the correlation between the special background of the top management and the internal control quality of the listed companies in China by the combination of theoretical analysis and empirical test,which is the research object of the 2013-2016 year listed A shares companies.The full text is divided into six parts.The first part is the introduction,which introduces the background,significance and framework of the research.The second part is the literature review,mainly from the top management background features,internal control quality,the correlation of top management background characteristics and internal control quality three aspects of the literature reviewed and summarized,and a brief review.The third part is the hypothesis of theoretical analysis and research.The theories involved Upper Echelons Theory,principal-agent theory and internal control theory,and the hypotheses are put forward according to the theoretical analysis.The fourth part is the research design.Based on the hypotheses,variables are selected to construct the models.The fifth part is empirical analysis.It carries out descriptive statistics and correlation analysis to each variable,and uses multiple linear regression to test the relationship between the top management background characteristics and the internal control quality of the enterprise.At the same time,the robustness test is carried out to further verify the regression results.The results of the paper show that:first,the overseas background of chairman and CEO is positively related to the quality of internal control of enterprises;second,the political background of chairman and CEO is positively related to the quality of internal control of enterprises;third,the military background of chairman and CEO is not related to the positive correlation of the internal control quality of the enterprise;Fourth,compared with state-owned enterprises,the positive correlation between the political background of chairman and CEO and the quality of internal control in non-state-owned enterprises is more significant.The sixth part is the conclusions and recommendations,and summarizes the shortcomings and research prospects.The innovative point of this paper is to start with the soft factor that affects internal control-the background characteristics of top management,and the research direction of this paper is not limited to the general characteristics of top management,but to define the special background experience of top management.This paper combines the special background experience of top management with the quality of internal control to study the impact on internal control of enterprises.How the background characteristics of the largest chairman and CEO affect their cognitive ability,judgment ability,risk awareness and other personal characteristics,and then affect their internal control formulation and implementation.