Management Background Characteristics?the Quality Of Internal Control And Firm Value

With the rapid development of science and technology,the competition is fierce.Enterprises face a complex and changeable internal and external environment,which bring development opportunities to all walks of life but also bring a huge challenge.Each enterprise attaches great importance to how to grasp the opportunity better and enhance the value of the company.At the same time,constantly fraud scandals in enterprises at home and abroad in recent years,such as enron,cao event,has caused a seriously bad impact on the market economy,this also reflects the internal control system is very weak in enterprise.So,how to improve the internal control system has become a core problem concerned by governments and companies.In this environment,traditional physical capital can not meet the requirements of enterprises but people who possess the subjective initiative and creativity can.As a result,people become a valuable resource for attention to company.What's more,Hambrick and Mason came up with "top tier" theories in 1984 has provided great support for the research about executives.Executives as the key part of human resources,grasp the important information of the enterprise,have significant decision-making authority,and lead the development direction,so they not only have great impact on the construction of internal control but the promotion of the value of the company.By combing the literature,this article found that there are many research about executive characteristics and company's strategy,investment efficiency,earnings management and financial fraud.Although the research about the relationship between executive background characteristics and the value of the company do not lack,the conclusion is not unified.The reason may be that the system of economy and environment,industry characteristics,enterprise in different stages,and also be the scope of the executive is not regulated.The current academia and scholars believe that there may exist intermediary variables,but the current research has little introduction of mediation between the two variables.In addition,previous research on internal control most concentrated on the corporate governance structure,the quality of internal control evaluation standard,and the influence factors of internal control defects and economic consequences,and so on,from the perspective of executive background characteristics to study the quality of the internal control is relatively small.Based on the literature and theoretical analysis,this paper tries to study the relationship between executive background characteristics and the value of the company,executive background characteristics and the quality of internal control,the internal control quality and the value of the company,at the same time,examines the mediation of the internal control quality between executive background characteristics and the value of the company.This paper selects the data from Shanghai and Shenzhen main board A shares listed companies about 3628 in 2013-2015.The background characteristics of executives selected for age,gender,educational background and term.Main conclusions are:(1)by studying the relationship between the background of executive characteristics and the value of the company,found that age,educational background and term of senior management team are significantly positively related to the value of company,but the relationship between the proportion of female executives and corporate value significance is not obvious;(2)the relationship between the background characteristic of executives and internal control quality,found that age,record of formal schooling and term of the senior management team are significantly positively related to the internal control quality,and the greater the proportion of female executives,the more unfavorable to the improvement of internal control quality;(3)the internal control quality are significantly positively related to firm value;(4)the executive's age,record of formal schooling and term in line with the major premise of the intermediary variable inspection.Through the further inspection,found that the quality of internal control has played a fully intermediary role in the age of the executive,education and the value of the company.Namely,age,record of formal schooling impact on the value of the company through the implementation of internal control quality;Internal quality control has played a partial mediation in the term and the value of the company,namely,the term impact on the value of the company only partly through the implementation of internal control quality.This study broaden the research scope of upper echelon theory and internal control theory.At the same time,put forward the following suggestions:(1)the optimization of the structure of senior management team.Choose older and highly educated personnel to be the company's executives.And pay attention to extend executive office,through the design appropriate incentives to retain competent executives.(2)the government and the regulators should continue to strengthen the management about internal control.Constantly improve the internal control system,and supervise the implementation of the enterprise,rewarding well-run enterprises for internal control properly,and the poor quality of the internal control of enterprises should be punished,supervise and urge its correction in a timely manner.(3)the senior management team members should attach importance to the construction of internal control.Executives take the lead in construction of internal control,which can ensure relatively scientific and adaptability,and make all staff aware of the importance of the internal control,ultimately,make internal control being effectively implemented.