An Empirical Study On Financial Risks,Internal Control And Reducing The Holdings By Managements

In recent years,China's stock market has developed rapidly.From the point of the development of securities market in China in recent years,each time the management of large scale reduce the company's shares held by the behavior,will bring the stock market into strong shocks,make the small and medium-sized shareholders generally lost investment confidence.Therefore,the academic group has gradually started to study the motivation of management to reduce its holdings.In the current research findings,it is very rare to consider the operational situation inside the enterprise,considering whether the financial risks faced by the company increase or not to trigger management detraction,also did not pay attention to the improvement of internal control quality,will strengthen the supervision of the management decision-making behavior,and thus reduce the management to the behavior of the holdings of company shares,Moreover,it is rare to link the financial risk,internal control and management's reduction of holdings,so as to explore the regulatory effect of internal control and whether it can influence the relationship between financial risk and management's reduction of holdings.In view of that relationship between financial risk,internal control and management's deduction,this article is on the basis of the data of the company on the two market of Shanghai shenzhen-2016 on the basis of the data of the listed companies,and the theoretical analysis and empirical study are carried out in accordance with the concept of "financial risk-internal control-management-management reduction",and the influence of the differences in the property of the property on the relations between them is further examined,finally the conclusion of the following three aspects is drawn.First,when the financial risk of the company increases,or the management predicts that the company will not be able to repay the principal and interest due on time in the future,the management will reduce the stock of the company in order to reduce the damage to its own interests.Compared with state-owned holding companies,the effect of non-state-owned holding companies is more significant.Second,high quality internal control can effectively inhibit the reduction of the management's holdings,and good internal control can strengthen the supervision of all links of the company,restrict the reduction of the management's holdings.The inhibitory effect is not different because of the property right nature.Third,improving the quality of internal control can inhibit the positive promotion effect of the company's financial risk on the management's reduction behavior.When the financial risk of the company increases,the improvement and effective internal control system can have a certain immune effect on the financial crisis facing the company.Similarly,the restraining effect is more significant in non-state-owned holding companies than in state-owned holding companies.The innovation of this paper lies in:First,the research achievements in the existing field are rich and expanded by adding financial risks and internal control factors in the research on the influence of management's deduction behaviors.The empirical research method provides data support,which demonstrates that the improvement of internal control quality can effectively restrain management's deduction and provide impetus for further development and implementation of internal control system.Second,based on the judgment enterprise investment value for small and medium-sized investors,reasonable arrangement of the portfolio,to explore how to avoid investment risk to provide important reference and basis.By further studying the influence of the difference of property right nature on the relationship between financial risk,internal control and management reduction,this paper provides empirical evidence for deepening the reform of state-owned enterprises.