Study On The Relationship Between Internal Control And Executive Incentive

The internal control system covers all aspects of business management,and plays a more prominent role in the quality of corporate accounting information,high quality and efficiency of operations,and compliance with laws and regulations,ensuring the normal operation of listed companies.The business operations are continuously cycled according to the processes of forecasting,decision-making,planning and budgeting,execution,comparison and evaluation,and summing up the lessons learned.The planning system for the next year is also based on the assessment results of the previous year and the experience summary.So the same is true whether it is an executive incentive or an internal control system that effectively mitigates corporate governance issues.In the implementation process of the executive incentive plan,on the one hand,the internal control system covers its role in the behavior of executives and the establishment of executive incentives;on the other hand,the internal control that excludes subjective influences as much as possible.The design of the system is of course important,but the implementation of the system and the supervision and correction are inseparable from the role of the people,especially the executives who play an important role in the daily management of the company.As executive incentives become more widespread and frequent,companies should also focus on the effectiveness of executive incentives to select more appropriate incentives.The research in this paper starts from the role of internal control in executive incentives,and selects the data of listed companies in Shanghai and Shenzhen stocks from 2012 to 2016 as samples,and distinguishes different property rights enterprises,different industry enterprises and different incentive methods in the study to make more specific recommendations.Based on theoretical analysis and empirical results,the following conclusions are drawn: First,the internal control system will significantly affect the company's executive compensation and equity incentives,improve the quality of internal control,and urge enterprises to give more incentives to executives.The control system can play a role in safeguarding the interests of seniorexecutives,and encourages executives to act actively in corporate governance.Second,The role of the internal control system can effectively enhance the company's value;at the same time,internal control can also play a role in the effectiveness of executive incentives,and different incentives will play a part of the intermediary effect.The role of internal control in corporate value and executive compensation incentives still deviates,verifying that the internal control system can suppress high in the long run.The short-term profit-seeking behavior that can be made solely for high-paying;the internal control has a positive correlation with the effectiveness of executive equity incentives.This is also the consistency of internal control and executive equity incentives in pursuing the long-term interests of enterprises.The improvement of internal control quality can also enhance the promotion of executive equity incentives on the company's value.