Research On The Influence Of Top Management Team Stability On Internal Control Quality

Since the Sarbanes-Oxley Act was introduced in 2002,internal control has gradually become a crucial role in protecting investors’ interests and ensuring the good operation of enterprises worldwide.The construction of internal control system has been paid more and more attention by the regulatory authorities in China.The Ministry of Finance,the Securities Regulatory Commission,the Audit Office,the Banking Regulatory Commission and the Insurance Regulatory Commission promulgated the Basic Standards of Enterprise Internal Control in 2008 in accordance with China’s actual conditions.Then five ministries and commissions jointly promulgated a series of basic norms,supporting guidelines and other rules and regulations on enterprise internal control.Since then,China has gradually established a standardized internal control system.In 2012,the scope of its implementation was extended to the listed companies on the state-owned holding motherboard,which indicates that the internal control information of our country has entered the stage of compulsory disclosure,and the construction of internal control of our country’s enterprises has since entered a new era.Internal control is related to the operation and management of enterprises,and then affects the interests of investors.Therefore,how to improve the quality of internal control has become an issue of great concern.Senior managers who directly participate in the operation and management of enterprises and have considerable decision-making power have the most direct and active impact on the internal control environment.In today’s fast-paced development era,the turnover time of senior executives is not uncommon.As the designer and implementer of internal control,the turnover of team members is bound to bring some impact on the internal control environment of enterprises.Therefore,from the perspective of the stability of the top management team,this paper will explore its effect on the quality of internal control,and add equity incentive variables to further reveal the impact of the stability of the top management team on the quality of internal control,and further explore the implementation of different degrees of equity incentives on the top management team.How does the stability of top management team play a moderating role in the process of influencing the quality of internal control of enterprises?In the past studies of internal control quality,there are not many studies on the stability of top management team,which makes this paper innovative and meaningful.This paper takes all A-share listed companies from 2013 to 2017 as the research object,and studies the influence of the stability of senior management team on the internal control quality of Listed Companies in China from two aspects of theoretical analysis and empirical test.The results show that a stable top management team can better maintain the internal control environment of the enterprise,and then maintain the high-quality internal control level of the enterprise.The higher the degree of equity incentive,the more significant the positive impact of the stability on the quality of internal control.The full text consists of six parts:the first part is the introduction,which introduces the research background,significance,research content and framework,as well as the innovation of this paper.The second part is literature review.This part combs the relevant literature which can be used for reference in this paper.It summarizes and summarizes the existing literature from the two aspects of internal control quality influencing factors and the economic consequences of the stability of senior management team,and makes a comprehensive review and analysis.The third part is the theoretical basis and research hypothesis.This part lists the principal-agent theory,the high-level echelon theory and the internal control theory as the theoretical starting point of this paper.On this basis,it carries out in-depth theoretical analysis of the research theme and puts forward the hypothesis accordingly.The fourth part is the research design,which clarifies the source of samples and data,defines the specific meaning and measurement criteria of the three main variables in this study,and finally proposes an appropriate regression model.The fifth part is empirical test and result analysis.Firstly,descriptive statistics and correlation analysis of all variables in this study are carried out.Then,multiple linear regression method is used to test the variables.At the same time,robustness test of sample data is carried out to verify the reliability of the research conclusions,and further exploration is made to solve the endogeneity between independent variable and dependent variable.The last part is the research conclusions and policy recommendations.In this paper,we summarize the previous empirical research conclusions,put forward corresponding policy recommendations,analyze the shortcomings of this study,and give some feasible suggestions on following researches.The innovation of this paper lies in:firstly,from the perspective of the stability of senior management team,it explores its impact on the quality of internal control,providing a new perspective for the study of the influencing factors of internal control;secondly,in order to further study the relationship between the two,this paper introduces equity incentive as a regulatory variable,and explores the regulatory mechanism of equity incentive in it.It enriches the research contents of the related literature on the characteristics of senior managers and internal control.