Research On The Impact Of Scholar Independent Directors On The Quality Of Internal Control

The independent director system occupies an important position in the governance system of listed companies.Independent directors mainly play two major roles in companies.One is to play a supervisory role,supervising the management and major shareholders,and protecting the interests of small and medium-sized shareholders;The second is to give full play to the consulting function and provide resource support for the company using their own professional knowledge and social network relationships.Combining the characteristics of the current independent director system and the situation of the capital market in China,the scholar independent director system has become one of the corporate governance mechanisms with Chinese characteristics.As the highest controlling body of the company’s internal control,independent directors play an important role in establishing,improving,and actually implementing the company’s internal control.Compared to ordinary independent directors,academic independent directors have more solid professional theoretical knowledge and higher social reputation.In order to maintain their hard-won reputation and reduce the cost of reputation damage,they will more actively perform their responsibilities and improve the quality of internal control.As a supplement to the formal system,the informal system of social trust also has an impact on corporate governance.Under different levels of social trust,the impact of academic independent directors on the quality of internal control varies.Therefore,the regulatory role of social trust in it is also worth studying.Firstly,this article summarizes the literature on academic independent directors,internal control quality,and related research on academic independent directors and internal control quality.Combining principal-agent theory,internal control theory,and reputation theory,it proposes a research framework for the impact of academic independent directors on internal control quality,and studies the regulatory effect of social trust in it.Secondly,using data from all A-share listed companies in China from2012 to 2021 as a research sample,this paper empirically tests the correlation between academic independent directors and internal control quality,the correlation between academic independent directors’ reputation and internal control quality,the correlation between accounting professional academic independent directors and internal control quality,and the regulatory role of social trust between academic independent directors and internal control quality,And further analyze the impact of academic independent directors on the quality of internal control under different property rights and different profit levels.Finally,based on the research conclusions drawn from both theoretical and empirical perspectives,suggestions are made for listed companies to select and hire independent directors,improve their internal control systems,and strengthen the construction of informal systems by the government.The results show that:(1)Scholar independent directors have a significant positive impact on the quality of internal control.This effect is more significant in private enterprises and enterprises in regions with high levels of social trust.(2)The higher the reputation of academic independent directors,the stronger their positive impact on the quality of internal control.(3)The academic independent directors of accounting profession have a significant positive impact on the quality of internal control.(4)Social trust plays a positive role in regulating the relationship between academic independent directors and internal control quality.