Executive Incentive,Product Market Competition And Enterprise Accounting Information Quality

Information becomes one of the most valuable resources in the times of big data and information economy.Meanwhile,with the development of capital market,accounting information is increasingly important for investors to evaluate the company before investment.High quality accounting information could optimize the allocation of enterprise resource,reduce the risk which caused by information asymmetry among various interested parties,and ensure that the securities market can develop steadily and healthily.However,a great many of public companies in China have financial irregularities with large amounts of money involved,which seriously affects the healthy and sustainable development of securities market.As a senior executive who is the main decision-maker in accounting information,could influence the corporate financial information through various aspects such as investment efficiency,company performance,internal control effect and financial status etc.Therefore,how to carry out effective incentive is of great significance thing which could help enterprise managers avoid "adverse selection" and "moral hazard";and also benefiting to upgrading the quality of enterprise accounting information.This paper is written on the basis of principal-agent theory,incentive theory,competition theory and signal transmission theory.The writer takes 1612 samples of A-share listed companies in Shenzhen from 2012 to 2015 as the research objects,combines the normative analysis method and empirical analysis,to find the relationship among executive incentive,market competition and the quality of accounting information,which could reveal the quality of management that effected by internal governance elements and external governance elements.On account of the Maslow's Hierarchy of Needs,the writer divides current executive incentive into explicit incentive and implicit incentive;also,Ordered Logistic model is applied in the regression analysis.The empirical results show that executive compensation incentive,equity incentive and promotion incentive have positive influence on accounting information,yet,control right incentive has an opposite affection.For,market competition will promote the effective development among the executive compensation,the equity and the promotion incentive effect,which can play an synergistic effect together;but couldn't improve the negative effects on control right incentive;and even exacerbates the negative impact in accounting information quality.The results show that the explicit incentives of senior executives have an obvious positive effect on the quality of accounting information.However,the two factors of implicit incentives---the expansion of the executives' control power and the promotion system,have different effects on accounting information quality.While the incentive of amplifying the executives' control power can enhance the company's operating efficiency,it does no help to improve the quality of corporative accounting information.The executives' over power of control makes them easy to earn their own interests and cover up financial information.However,promotion system enhances the management structure,which greatly improves the accounting information quality.On the other side,as a way of external governance,market competition also has a positive effect on enterprise management.Cooperated with the internal governance,the market competition can promote the quality of the accounting information.This provides a theoretical basis for enterprises to adopt effective incentive measures and choose effective executives incentives according to their own industry.Therefore,the appropriate incentive mechanism and benign market competition help to enhance the quality of accounting information,thus helping to improve China's capital Market health.