| With the development of the world economy, the domestic and foreign financial scandals emerge. The third party supervision of internal audit on corporate governance questioned continuously. But internal audit act as an internal independent advisory activities, aims to prevent internal fraud, increase the operation value, realize the goal of enterprise. Through the use of a complete set of methods, assess the risk, improve management, enhance the governance effect. Its huge influence caused the government and the public attention. The degree of reliability of internal audit role depends on its quality, internal audit of high quality, can carry out the plan of effective supervision, the system of company, and improve the self restriction mechanism, prevent internal fraud, and ultimately improve the economic benefits of the company. The Modern Corporation, shareholders hire with high ability to act as the company’s senior managers, instead of shareholders of enterprise management, the business decision making to decide the enterprise success or failure. Establishing a scientific and reasonable remuneration system, so that the interests of corporate executives and their performance and management level combination, form an effective incentive and constraint of executive. Executive compensation, either monetary compensation or the equity incentive for executives’ behavior has an important guiding role. The influence of the behavior of the executives of the internal audit objective existence, by transitivity is not difficult to find that executive compensation has a certain effect on the quality of internal audit. This paper uses the method of combining theoretical analysis and empirical analysis of the correlation between executive compensation and the quality of internal audit is studied.First of all, the internal audit and internal audit quality has carried on the related literature review, mainly from the internal audit internal audit quality and the importance of factors affecting the quality of internal audit development, review. After the relevant literature on executive compensation review. Mainly from the executive compensation effect on the performance of the company and to the existence of internal control effects are reviewed.Secondly, this article from the principal-agent theory, corporate governance theory, incentive theory, signaling theory, has controllable quality of internal audit based on the fact that, to analyze the behavior of the executives to affect audit quality applied inside, at the same time the executive compensation for executives of the bank to have certain guidance. Finally obtains the effects of executive compensation for the quality of internal audit.Again, analysis method is used to sample data for empirical tests the effect of executive compensation for the quality of internal audit. Internal audit related information data samples in this paper, the above card A share of the company defines the quality of internal audit. With the country Tai’an database of executive compensation, the proportion of management shareholding to represent the level of executive pay. Comparative study of samples and the control samples, makes a descriptive analysis, correlation analysis and multiple regression analysis test shows that: executive compensation related to the internal audit quality is positively; the proportion of management shareholding is positively associated with the quality of internal audit. This study concluded that: in our country, the level of compensation is one of the factors that influence the quality of internal audit.Finally, in the above theoretical analysis and Empirical Study on, combined with the research conclusion, put forward the following suggestions: establish and improve the executive compensation incentive system, maintain a reasonable equity incentive mode, to improve the executive compensation disclosure system and improve the internal audit system four aspects, at the same time, according to the results presented in this paper and the limitations and deficiencies. |
