The impact of internal control on management expenses
DOI:
https://doi.org/10.54691/bcpbm.v16i.300Keywords:
Internal control; Administrative expense; manufacturing industry; Listed companyAbstract
Administrative expenses affect the profitability of enterprises, an thorough internal control can save administrative expenses or reduce unnecessary administrative expenses. Taking listed manufacturing companies as samples, this paper studies the relationship between the quality of internal control and management costs with empirical methods, aimed at providing useful references for listed manufacturing companies in China to improve the utilization efficiency of management costs and internal control. Study shows that: (1) the improvement of internal control quality helps to reduce the proportion of overall management costs significantly, (2) the effective internal control can also significantly inhibit the proportion of pay, office, travel , business entertainment and commission in the administration expense, (3) improving the quality of internal control can't significantly reduce the proportion of r&d.
Downloads
References
Hou Baoliang. Analysis of common practices of foreign internal control [J]. Commercial Accounting, 2014 (23): 88-89.
He Yu. Job fraud, internal control, and internal auditing——Comments on the job fraud case of Societe Generale in France. [J]. Audit Research. 2009(02)
Lu Rui, Liu Jianhua, Xu Ning. Internal control, property rights and executive compensation performance sensitivity [J]. Accounting Research, 2011 (10): 42-48+96.
Chi Guohua, Guo Jingjing. Does the quality of internal control affect executive compensation?——Based on the empirical evidence of Chinese A-share listed companies[J]. Journal of Nanjing Audit University, 2015, 12(01)
Chen Donghua, Liang Shangkun, Jiang Dequan. The cost and choice of executive incentive contracts under different marketization processes: monetary compensation and on-the-job consumption [J]. Accounting Research, 2010 (11): 56-64, 97.
Wan Hualin. A review of foreign on-the-job consumption research [J]. Foreign Economics and Management, 2007 (9): 39-41, 65.
Dou Xiangsheng, Wang Zaifeng, Zhang Ruixiong. The influence of internal control on executive compensation and on-the-job consumption[J]. Business Research, 2017(05):109-113.
Li Jingping, Xue Yiyi. Current local government public funds eating and drinking phenomenon and governance research [J]. Administration and Law, 2010 (6): 1-5.
Mou Shaohong, Li Qihang, Chen Hanwen. Internal control, nature of property rights and excess in-service consumption——Based on the empirical research of non-financial listed companies from 2007 to 2014. [J]. Audit Research. 2016 (04)
Fu Chao. Free cash flow, internal control and hidden corruption of executives-empirical evidence of state-owned listed companies under the background of eight regulations [D]. Tianjin University of Commerce, 2018.
Lu Rui, Wei Minghai, Li Wenjing. Management power, on-the-job consumption and property rights efficiency: Evidence from listed companies in China [J]. Nankai Management Review, 2008(05): 85-92+112.
Li Wanfu, Lin Bin, Song Lu. The role of internal control in company investment: efficiency promotion or inhibition? [J]. Management World. 2011 (02)
Wu Ning, Li Kao team, Li Guodong. Internal control, marketization process and enterprise risk-taking [J]. Business Research 2015 (07)
Fang Hongxing, Chen Jiaojiao, Yu Qiaoye. Research on the Influencing Factors of Internal Control Audit Fees. [J]. Audit and Economic Research. 2016 (04)
Quan Xiaofeng, Xu Xingmei. Venture Capital, Internal Control and Audit Pricing[J]. Financial Research, 2017 (6): 132~145.
Song Yinghui, Chen Yanrong. The impact of the effectiveness of internal control on audit pricing——based on the empirical verification of the Shenzhen Stock Exchange's manufacturing industry [J]. Taxation and Economy, 2013 (5): 53~59.
Xiao Chengmin, Li Rong. Will internal control affect audit opinions? [J]. Accounting and Economics Research, 2012 (2) 34~41.
Li Yuedong, Zhang Dong, Liu Weiwei. Major defects in internal control, nature of property rights and audit pricing. [J]. Audit Research. 2014 (02)
Deng Wentao, Ping Aijia, Xiong Huanhuan. Research on the influence of internal control and management power on audit fees [J]. Chinese Certified Public Accountant, 2018 (05): 49-54+3.
Zhou Meihua, Lin Bin, Lin Dongjie. Management power, internal control and corruption governance. [J]. Accounting Research. 2016(03)
Lu Yuanyuan. Research on the impact of on-the-job consumption on corporate performance [D]. Capital University of Economics and Business, 2018. [22] Feng Mei,Li Chan,McVay S．Internal control and management guidance [J]. Journal of Accounting and Economics,2009,48: 190209．
Kanodia C, Lee D． Investment and disclosure: the disciplinary role of periodic performance reports [J]. Journal of Accounting Research,1998,36:3355
HART O． Financial contracting [J]. Journal of Economic Literature,2001, 39( 4) :1079 －1100．
Robert Simons . Control in an age of empowerment. Harvard Business . 1995
Gianmario Verona. A Resource-Based View of Product Development[J] . The Academy of Management Review . 1999 (1)
Kaplan R, Norton D. The balanced scorecard: translating vision into action. IT Governance. Information Systems Control Journal,1996.
K． Raghunandan,Dasaratha V． Rama． SOX Section 404 material weakness disclosures and audit fees [J]. Auditing,2006,(1): 99 －114．
Hogan,Chris E． ,Wilkins,Michael S． ,Evidence on the audit risk model: Do auditors increase audit fees in the presence of internal control deficiencies? [J]. Contemporary Accounting Research,2008,25( 1) : 219 －242．
Downloads
Published
Issue
Section
How to Cite
