Study On The Impact Of Executive Compensation On The Effectiveness Of Internal Control

Internal control as a modern enterprise system,the important content,can effectively prevent the distortion of accounting information to prevent fraud and financial companies with significant risks,thus improving the reliability of financial information,the transparency of listed companies zo plus accounting information.At the same time,our internal control development time is shorter,relevant systems and regulations are not perfect,objectively resulting lack of supervision of internal control,internal loss of restraint mechanism and internal control status of the poor implementation of the results,and these problems exists mostly internal control is due to internal and external factors in the establishment and implementation process caused.Therefore,the study of factors influence the effectiveness of internal control,trace the origin to study the effectiveness of internal control of accounting academia to become a serious problem.But throughout the existing internal control study literatures,the main concern is the disclosure of internal control deficiencies studies,research and other economic consequences of internal control,even if there are factors affecting the effectiveness of internal control over the discussion,very few literature incentives from the starting level executives,executive compensation research on the effectiveness of internal control influence.In this paper,the study on the basis of the relevant domestic and foreign,starting from executive compensation to the effectiveness of internal control factors for further exploration.In this paper,listed small manufacturing companies from 2012 to 2014 in Shenzhen are used as samples,and empirical research methods is used to affect executive compensation of internal control effectiveness.First,the definition of executive compensation is divided into monetary compensation and executive proportion of executives holding two parts;secondly,to establish a measure of the effectiveness of internal control based on the index system of internal control objectives;again,using empirical analysis research executive compensation and internal control the effectiveness of the relationship between the index and concluded: China's listed companies executive compensation levels and the salary structure is not perfect,an appropriate increase in executive pay will help improve the quality of internal control,internal pay gap is not conducive to improving the effectiveness of internal control the business executive pay levels and the industry average positive gap in favor of enhancing the effectiveness of internal controls,the negative gap is not conducive to improving the effectiveness of internal controls;and finally,based on empirical results,combined with our executives in listed companies remuneration system and internal controls established the practical problems facing the construction,put forward policy recommendations.