Executives Change And Internal Control Study On The Relationship Between The Major Defects

One of the most important criterion to test corporate governance's effectiveness is good executive change mechanism.In our country,as the securities market develop,executive change become more and more popular.Executive is the key of corporate governance,business goal.Executive may responsible for business' s organization structure,development strategy,business plan and firm performance.Given the importance of the senior executives for companies,senior executives of the change is a major matters of the company,to be able to deliver the company from the side good problems or company information.This paper is divided into the change of the normal and abnormal change of executives to change,by studying the executives abnormal change and the relationship between internal control Defects,executives found abnormal change often means that the company internal control Defects.So the signal transmission function of executive abnormal change behavior has important significance to strengthen market supervision and regulation.This article selects the chairman,general manager,the independent directors as proxy variable of executives,in A 2013-2015 Shanghai and Shenzhen a-share listed company chairman,general manager of change,the independent director abnormal departure as investigation object,the internal control Defects as proxy variable,respectively,the chairman,general manager of abnormal changes and the relationship between internal control Defects,chairman of the board of directors,general manager of abnormal changes after one or two full fiscal year and the relationship between the internal control Defects,the independent director abnormal resign and the relationship between internal control Defects,based on the independent directors as A special kind of executives,the paper compares the chairman of the board of directors,general manager of abnormal abnormal change and independent directors to resign passing out the Defect of the internal control of the strength of the signal,extend the executive changes the behavior of the scope.The empirical results show that the chairman of the board of directors,general manager of abnormal change and internal control Defects is significantly related to the chairman of the board of directors,general manager change after one or two complete fiscal year,a significant reduction in the severity of the internal control Defects,this shows that in the abnormal changes of executives,the succession of competent executives will proceed to rectify Defects to the company.The results also showed that the independent directors abnormal resigned with a major Defect is significantly related to the internal control compared with the chairman and general manager sent internal control Defects in stronger signal.The contribution of the article is: first,based on the three years 2013-2015 as the research time window,the sample is more,the chairman of the board of directors,general manager of a normal change and the relationship between internal control Defects,enrich the information content of executives abnormal changes,thereby can throw some light on the internal control of the company's potential risk,have the effect of protecting the interests of investors.Second,this article will take out a special executive separate independent director studied its abnormal resign on internal control Defect signal transfer function,which is of great significance to strengthen market oversight.