Research On The Influence Of Managers' Power And Internal Control Quality On Cost Stickiness

With the interaction between external environment and internal interests of enterprises,the viewpoint of linear symmetry between cost and business volume in traditional cost behavior can not provide accurate cost decision information for information demanders.Noreen and Moderstorm(1997)and Cooper and Kaplan(1998)believe that the cost management behavior of managers will not only affect the relationship between the cost and the magnitude of business volume change,but also the relationship between the cost and the direction of business volume change.ABJ(2003)borrowed the concept of "Price Stickiness" in economics,called the phenomenon of Cost Stickiness that the increase of cost when business volume rises is greater than the decrease of cost when business volume decreases at the same level,and tested the existence of cost stickiness through large sample data for the first time,which laid the foundation of the research in this field.Based on principal agent theory and managers' power theory,the paper explores the relationship between managers' power,internal control quality and cost stickiness,and provides empirical evidence for the study using large sample data.The valid data of the paper is from 2010 to 2017.All A-share listed companies in China are taken as samples.The results of the whole sample test show that:(1)there is a common problem of cost stickiness(stickiness of marketing and management fees or total operating costs)in Chinese listed companies;(2)there is a significant positive correlation between managers' power and cost stickiness in Chinese listed companies,that is to say,the higher power managers have,the higher the cost stickiness level of enterprises will have;(3)internal control quality can weaken the relationship between managers' power and cost stickiness,that is to say,the increase of internal control quality system will inhibit the cost stickiness caused by self-interest behavior of enterprise management.Throughout the domestic and international research,we can find that the research on the issuer of cost stickiness behavior(management)and cost stickiness is weak,so analyzing the cost stickiness from the perspective of behavioral subject is a new perspective.Moreover,there is a lack of further research on management external characteristics(management power)and cost stickiness.In addition,effective internal controls can alleviate agency problems between shareholders and management,and management power is overseen and managed by effective internal controls.Therefore,the relationship between the external characteristics of the cost behavior issuer and the cost stickiness has a good research value.The research on the regulation of the internal control quality can also guide the improvement of the internal control quality of the enterprise.