Research On The Effect Of Executive Self-interest And Overconfidence On The Effectiveness Of Enterprise Internal Control

Under the "new normal" of China's current steady economic growth,it has also been affected by the phenomenon of "black swan" in the external international market.In the face of the complicated market environment,China's listed companies have put forward higher requirements for their internal governance level and internal control execution.The factors that can affect the level of corporate governance and internal control have become problems to be solved and solved.At the same time,the behaviors of corporate executives run through the whole process of internal control and implementation,but they are affected by the separation of powers.The deviation of personal characteristic attributes and psychological factors is more prominent in corporate governance.Compared with the traditional rational "economic man"hypothesis,the existing research believes that human behavioral motives are pursuing the maximization of their own interests.Although there is no direct evidence that executives exercise intentional self-interested behavior,they themselves will be subject to Irrational cognitive influences produce decisions that deviate from the goal.However,according to the basic provisions of the company law and the constraints of the existing manager market,the executives at the top of the "pyramid" are more inclined to pursue their own honor,status and sense of belonging on the basis of self-realization.The incentives obtained will promote reasonable behaviors to ensure the effective implementation of internal control;but for the irrational overconfidence of executives,the deviation caused by this behavior will increase the risk of business operations.To this end,through comprehensive consideration of the rational and irrational behaviors of corporate executives,to further analyze the mechanism of influence on the effectiveness of internal control of enterprises,aiming at improving the overall governance level and corporate value of the company.This paper analyzes the existing research and combines relevant theoretical foundations as the basis of the argument.Based on the sample of Shanghai and Shenzhen A-share main board listed companies in 2013-2016,the self-interested behavior of executives and overconfidence of executives were tested by multiple regression analysis.And the relationship mechanism between the three internal control effectiveness.The research shows that based on the perspective of "efficiency concept",it is believed that the incentive effect of executive compensation self-interest behavior and invisible on-the-job consumption behavior will positively promote the effectiveness of internal control of enterprises;further,through group research,the more dispersed executive power is found The more obvious the role of external institutional investors in monitoring,the more significant the positive effect,but the institutional investors' conclusions on the effectiveness of on-the-job consumption and internal control are not valid.The excessive judgment of risk and benefit generated by the executive's overconfidence behavior will have a significant inhibitory effect on the effectiveness of internal control;further group tests find that the more concentrated the executive's power,the more significant the negative relationship;The more obvious the checks and balances of external institutional investors,the more obvious the restriction on this relationship.Finally,the study found that executives' overconfidence behavior played a partial intermediary role in the effectiveness of internal control in their self-interested business management decisions.Based on the above research conclusions,this paper proposes relevant policy recommendations from two aspects:corporate executive behavior and internal control effectiveness.