Financial Control Issues In The Parent Company Based On Agency Theory

With the expansion of capital management and capital deepening, Enterprise Group has increasingly become a modern enterprise management and organizational structure of an important form of organization. The financial control is a subsidiary of Enterprise Group Corporation substantive control of important aspects of its production and operation activities permeate all aspects and aspects. Enterprise Group is only the successful implementation of effective financial control in order to realize the control of its subsidiaries. Therefore, strengthening the head office of financial control of subsidiaries, the company is currently facing businesses a very important issue.With the development of society, business groups and economic interests of the gradual growth of the deepening of the financial control of subsidiaries in the head, many problems arise, mainly in:Head for the existence of a subsidiary within the system lags behind financial control, financial budget management and weak supervision and examination, inefficiency and other issues, reasons, mainly head office is not in place financial control of subsidiaries and agent did not effectively play its incentive and constraint functions. Particularly financial control, has an important role, it is a subsidiary corporation of the importance of financial management, regulatory basis of accounting. But a large number of empirical studies of capital market, capital market, the existence of that information asymmetry: a subsidiary corporation is not always known to have internal financial information, is always biased in favor of their own on the one hand the development, resulting in head office staff blinded and property damage.Uncertainty, agents of public issues and product characteristics of accounting information leads to the existence of asymmetric information, and technological innovation, financial instruments and the establishment of subsidiary companies are exacerbated by the wave of the degree of information asymmetry. Empirical studies have shown that asymmetric information can cause adverse selection, market liquidity, lower cost of capital increases, moral hazard and insider trading, all greatly affect the Corporation's achievement of objectives and the efficiency of financial control. While maintaining fairness and efficiency of the financial corporation is a subsidiary corporation of the main financial and accounting regulatory control objectives. Therefore, the information asymmetry to become head of a major subsidiary of one of financial control. While the information asymmetry can not be completely eliminated, empirical research shows information disclosure can reduce information asymmetry, thereby reducing the information asymmetry of accounting information disclosure should be the norm of the starting point.In this paper, theory of agency head appointed Chief Financial Officer of the subsidiaries of financial control, which is a subsidiary of ensuring the right to operate on the basis of production to ensure the head office of financial management objectives to achieve a means, not only regulate financial subsidiaries accounting practices, is not dampen the enthusiasm of production and operation of subsidiaries, while maintaining the control of regulatory accounting purposes. Keywords...