Government Audit And State-owned Enterprise Executives In-service Consumption

The in-service consumption of executives is a common problem in China's state-owned holding enterprises.Due to the hidden nature of on-the-job consumption and the lack of mandatory disclosure,it has become a breeding ground for high-level executive corruption.State-owned enterprise executives use their own rights to ingest private income through on-the-job consumption,which not only damages the interests of enterprises,increases the agency costs of enterprises,but also causes the loss of state-owned assets.Although the Chinese government has successively introduced some policies to regulate the compensation system and job expenditure of state-owned enterprise executives,the in-service consumption chaos has not been completely contained.Since to 2003,the Audit Commission has selected some state-owned enterprise group companies to inspect their business receipts and expenditures and whether executives perform their integrity.The intervention of the government audit department will investigate and deal with violations within the enterprise.And through the audit results,the problem will be announced to the public,so that it can not only serve the purpose of governing the business activities of state-owned enterprises,but also play a deterrent and supervisory role in the behavior of state-owned enterprise executives.Therefore,based on the audit results announcement system,this paper examines whether the intervention of government audit has a restraining effect on the on-the-job consumption of state-owned enterprise executives.Based on the theory of corporate governance,public trust economic responsibility theory and signal transmission theory,this paper analyzes the relationship between government audit and executives' on-the-job consumption,and expounds the impact of government auditing on the consumption of on-the-job consumption.In the case of different marketization processes,the effect of government audit on the on-the-job consumption of executives is different,and on this basis,the hypothesis of this paper is proposed.In order to verify the hypothesis of this paper,the list of announcements of the audit results of the central enterprises announced by the official website of the Audit Office in 2011-2017 is selected,and then the listed A-share listed companies controlled by the central enterprises are selected as audited samples to 2009-2016.Based on the financial data of the year,empirical research was carried out using OLS regression,panel data fixed effects and quantile regression.The results show that:Firstly,government audit has a significant inhibitory effect on the in-service consumption of state-owned enterprises;secondly,in areas with low marketization levels,the effect of government audit on the in-service consumption of executives is more obvious;finally,the proportion of on-the-job consumption is different.Under the quantile,the effect of government auditing on negative adjustment is different When the proportion of on-the-job consumption exceeds 50%,the effect of government audit on the on-the-job consumption of executives is more obvious with the increase of quantile.The higher the amount of on-the-job consumption of enterprises,the more likely it is that illegal behaviors of corporate executives using their positions to obtain private income will be more obvious.At last,this paper puts forward corresponding policy recommendations on how to manage the on-the-job consumption of executives,including:improving the on-the-job consumer disclosure system,strengthening the governance function of government audits,improving the compensation system of state-owned enterprise executives,and improving the state-owned enterprise managers.