Research On The Impact Of Internal Control And Cost Stickiness

With the rapid development of social economy and trade,many companies have to strengthen the management and control of cost in order to improve their competitiveness and reduce unnecessary cost expenditure to obtain higher profit margin.Since Noreen and Soderstrom first proposed the concept of "cost stickiness",many scholars have paid special attention to this issue and tried to find ways to improve the status quo of enterprises.Many studies have shown that internal control can reduce cost stickiness.Based on this,this paper studies the ways of internal control influencing cost stickiness,and tries to explore the intermediary role of agency cost between internal control and cost stickiness from the perspective of principal-agent.It has certain theoretical and practical significance.It not only enriches the research on the influencing factors of cost stickiness,provides an important reference for the study of corporate governance,but also provides some reference for listed companies to control costs,optimize the allocation of resources,improve the profits and competitiveness of enterprises.Firstly,this paper elaborates the background and significance of the research,combs the literature about internal control,agency cost and Cost Stickiness at home and abroad,explains and combs the related concepts and theories involved in the research,and then puts forward hypotheses on the relationship between internal control,agency cost and Cost Stickiness and the relationship among them.This paper chooses A-share Manufacturing Listed Companies in Shanghai and Shenzhen Stock Exchanges from 2013 to 2017 as samples,using management cost rate and total asset turnover rate as substitute variables of agency cost,and verifies the hypothesis through descriptive statistics,correlation analysis and regression analysis.Research shows that internal control will affect cost stickiness,and agency cost is an intermediary variable,which means internal control can reduce the Cost Stickiness by reducing the occurrence of agency cost.Based on the conclusion of this study,this paper puts forward relevant suggestions for enterprises and the state.For example,enterprises need to improve internal control system,strengthen cost management and improve executive incentive mechanism,and the state needs to standardize enterprise cost management system and improve the quality of enterprise managers,These methods can help enterprises reduce cost stickiness,realize their own value maximization and sustainable operation.