Quality of Internal Controls, Management Compensation and Corporate Surplus Management

Abstract

After enterprises enter high-quality development, the quality of corporate accounting information has received attention from all walks of life, and the internal control of enterprises and the salary level of management play a crucial role. Based on the perspective of management's salary level, the relationship between internal control quality and corporate surplus management is empirically investigated with a sample of A-share listed companies from 2011 to 2021. What’s more, the contribution of management's salary level to internal control and corporate surplus management is studied through a moderating effect model, and the robustness of the relationship is verified through multiple testing models. The empirical results show that the quality of internal control can significantly inhibit the accrual surplus management behavior and the real surplus management behavior of enterprises and improve the quality of accounting information and decision usefulness, and the higher the level of management compensation, the better the inhibiting effect of internal control on the surplus management behavior of enterprises.