Internal Control,Managerial Power And Corruption Governance

Since president Xi Jinping took office as the chairman,the party and the country set off a new upsurge of anti-corruption,the community is increasingly concerned about the issue of corporate executives corruption.High concentration of management power may mean that too many resources of the enterprise are controlled by the executives of the enterprise.Under the management power theory,it is too difficult for the compensation to ease the agency problem.The management gets more power,more serious abuse of power executives will be.They also have more motivation to seek excess returns even that will result in corruption or bribery crime.In addition,executives of corruption not only restricts the development of enterprises but also brings a serious disaster to the country.In order to promote the healthy development of enterprise economy,maintain social harmony and stability,anti-corruption Governance are staring us in the face.In recent years,China has put forward higher requirements for the internal control of enterprises,more requirements for enterprises to actively build and disclose the internal control system,internal control is also getting more and more attention from all sectors of society.As an advanced idea of modern enterprise management,it is of great significance for the internal control to promote the enterprises to establish a more effective governance structure.For executive corruption,First,the internal control of enterprises can prevent the occurrence of corporate executives corruption at the very beginning.Secondly,the internal control of enterprises can be controlled through the matter,preventing and cutting off the path that may lead to the occurrence of corruption,so as to inhibit the occurrence of the behavior of executives.Finally,the internal control can be used to post supervision according to executives of corruption cases which have occurred before,analysis of mechanism of adverse circumstances,and then find the defects and prompt improvement in enterprise internal control,avoiding future occurrence of similar corruption.According to the goal of internal control construction,the establishment of effective internal control should play a role in regulating the contradiction between executive compensation,management rights and corruption of the three.One of the important reasons for the existence of implicit executive service consumption over extravagant corruption,is because the corporate governance mechanism is not perfect,the construction of internal control of the irrational,thus can not effectively restrict the irrational use of resources of the company executives.However,when talking about the relationship between internal control and managerial corruption specifically,is internal control really effectiveinthe prevention of the corruption risk caused by the concentration of management power?Isit truly promote the enterprise healthy development?That requires more theoretical analysis and empirical data to support.This article ismeanto,through the combination of theoretical analysis and empirical test,investigate the effect of the occurrence of executive corruption in the capital market from the internal control perspective and further analysis the authenticity of the internal control can effectively restrain the corruption of power induced by management.First of all,this paper theoretically analyzes the impact of internal control on corporate executive corruption,and the relationship between the internal control and corruption caused by the power of management is also described.Then it is put forward that the high level of corporate executive corruption is caused by the excessive concentration of management authority,and the internal control plays an inhibitory role in the generation of the executive corruption.Secondly,based on the 2013 and 2014 China's main board listed companies asthe sample of the results of theoretical analysis empirical analysis.The following conclusions are drawn: the greater the managerial power,the more serious the enterprise corruption;the better the quality of internal control,the level of corruption is smaller,and the effective internal control can inhibit management corruption induced by power.Based on the previous related research,this paper makes the following innovation:first,this paper choose internal control as the starting point to study corruption which is a great change from that in the past studies;secondly,the past research on the internal control mainly focused on the promotion of enterprise value and business risk prevention,ignored the political consequences of internal control,but this paper made up.Finally,this paper chose more comprehensive research samples and more scientific research methods to make the research result more convinced.This study shows that the excessive concentration of power management is an important factor which may lead to corruption.Internal control can constraint the power and reduce the incidence of corruption,this provided corresponding empirical support for the appeal of “Governing the country according to law,combating corruption and upholding integrity” which is advocated by President Xi.