Research On The Influence Of Enterprise Internal Control On Executive Corruption

Corruption is the product of human economic and social development,and it has arisen with the development of class society.It has not yet been effectively resolved.Since the 18 th national congress of the communist party of China(CPC),our party has vigorously promoted the fight against corruption.With the investigation and handling of a large number of corruption cases,a large number of officials have been punished by law for corruption and the social environment has been purified.China's system of anti-corruption has achieved phased results,and anti-corruption pressure has been formed.At present,the situation of corruption in our country has gradually changed,and the problem of corruption has gradually spread from the political field to other fields.The corruption of executives in the economic field is particularly serious.Corruption of senior executives has reduced the value of the enterprise,caused the loss of corporate assets and decreased investment efficiency,which is not conducive to the long-term development of the enterprise.At the same time,for the country,it is not conducive to the formation of a good investment environment and harms the image of the country and the fairness and justice of society.Internal control,as a kind of enterprise system and management process that integrates a variety of means,plays an important role in the operation and development of enterprises.Firstly,internal control can improve the investment efficiency of enterprises,restrain the capital occupation of major shareholders,and reduce the litigation risk and financing cost.Secondly,internal control can suppress earnings management and ensure the robustness of accounting and financial information.Finally,internal control can reduce agency costs and operational risks and reduce opportunistic behaviors through power restriction and information disclosure.Therefore,whether internal control can inhibit the corruption of executivesis worthy of further study.In addition,the Supervisory Board,as an important part of China's corporate governance structure,is the statutory supervision agency in the company.The role of the board of supervisors can strengthen the supervision of the behavior of company executives and the implementation of company policies,and it has an important impact on the effective exertion of internal control.Therefore,this paper discusses the relationship between executive corruption and enterprise internal control,and analyzes the moderating effect of the characteristics of the board of supervisors on the relationship between the two.This paper takes A-share listed companies in Shanghai and Shenzhen from 2007 to 2016 as samples to test the hypothesis of this paper.From the point of view of internal control,this paper studies the internal control and executive corruption.In the research,the executive corruption behavior is firstly divided into executive explicit corruption and executive implicit corruption,and the relationship between the two is studied respectively.Secondly,the characteristics of the board of supervisors are included in the model,and the relationship between the characteristics of the board of supervisors and executive corruption and internal control is explored.Finally,through the robustness test and endogeneity test to ensure the robustness and rationality of the results of this paper.Through theoretical analysis and empirical analysis,the following conclusions are drawn.First,explicit executive corruption can be curbed by good internal controls.The higher the quality of internal control,the less executive corruption of executives will occur.Second,internal control also has a restraining effect on the implicit corruption of senior executives.With the improvement of the level of internal control,the possibility of moral hazard is gradually reduced,which is conducive to reducing the implicit corruption of senior executives.After the sample grouping study,it is found that the implicit corruption level of state-owned enterprises is high.Internal control has different effect in inhibiting the corruption of executives of state-owned and non-state-owned enterprises,and internal control of non-state-owned enterprise executives has a stronger effect on inhibiting corruption.Finally,through the analysis of the moderating effect of the characteristics of the board of supervisors,this paperholds that the increase of the shareholding ratio of the board of supervisors can improve the supervisory function of the board of supervisors,improve the effectiveness of internal control by means of incentives,and reduce executive corruption.The expansion of the size of the board of supervisors is not conducive to the exertion of the supervisory functions of the board of supervisors,and it is not conducive to curbing the corruption of executives.Therefore,in the construction of the board of supervisors,attention should be paid to the professional background and professional capabilities of the members of the board of supervisors to ensure the effective functioning of the supervisory function.To sum up,this paper believes that internal control,on the one hand,can inhibit the explicit corruption behavior of executives,and on the other hand,internal control can also inhibit the implicit corruption behavior of executives,and reduce the agency cost and corruption risk of enterprises.At the same time,the supervisory role of the board of supervisors can improve the effectiveness of internal control,and provide corresponding suggestions for national policy departments and listed companies,and provide a certain reference for national supervision and corporate management.Finally,the research limitations of this paper are elaborated,and some suggestions are provided for future research directions in this field.