The Influence Of Product Market Competition?Top Management Turnover On Internal Control Quality

Since the United States Enron incident,the United States introduced the "Sarbanes-Oxley"(hereinafter referred to SOX)bill,internal control has gradually become the focus and hot spots of global attention.With the development of modern enterprises,top managements play a vital role in major decision-making such as strategic choice.In recent years,top management turnover event in listed companies in our country has occurred frequently.The impact of top management turnover on the quality of internal control has also become one of the main contents of corporate governance.The effect of corporate governance on product market competition has not yet reached an unanimous conclusion in academia,and its impact on the quality of internal control needs to be studied urgently.This paper mainly studies the influence of top management turnover and product market competition on the quality of internal control.First of all,this paper reviews the literature about the influential factors and economic consequences of top management turnover,the influencing factors of internal control quality,product market competition and corporate governance.Secondly,it uses the principal-agent theory and the high-level echelon theory to describe the influence path of the change of the executives on the quality of internal control.Because there is an inconsistency between the information asymmetry and the interest function between the owner and the top management,this gives top managers the possibility and opportunity of opportunistic behavior.At the same time,the replacement of top management is faced with the reconstruction of the relationship network,the reorganization of the top management team,the redistribution of authority,so top management turnover will lead to the decline of the quality of internal control.In addition,based on the theory of industrial organization,this paper describes the impact of product market competition on the quality of internal control.The behavior of enterprises is influenced by the market structure and the competitive position of enterprises.The more intense competition,the stronger the motivation of top management to improve corporate governance efficiency,product market competition will help improve the quality of internal control.Then,this paper takes the whole A-share listed companies in Shanghai and Shenzhen as the research object from 2010 to 2015,and then uses the method of empirical research to test the influence of top management and successor source on the quality of internal control.Secondly,considering the nature of property rights,this paper examines the impact of market competition and market competition on the quality of internal control.The results show that:(1)There is a negative impact between top management turnover and the quality of internal control.(2)successor sources from outside,top management turnover negatively affect the quality of internal control.(3)The higher the competition intensity of the non-state-owned listed companies,the worse the quality of internal control;the higher market competitive position of non-state-owned listed companies are,the higher the quality of internal control are.This indicates that top management turnover can influence the internal quality of the internal control by influencing the internal environment of the internal control,and the influence of the product market competition on the internal control quality of the state-owned listed company.For the non-state-owned listed companies,industry-level product market competition has produced a heterogeneous effect of governance effect,the company level of product market competition has a significant governance effect.Therefore,listed companies should improve the ability to deal with risk,improve the importance of executives on the internal control,while enhancing their competitive position,consciously internal control and management system integration.