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- Title
Can non-executive equity incentives reduce internal control ineffectiveness? Evidence from China.
- Authors
Dunli Zhang; Ting Zhang; Guanghua Ma
- Abstract
Using data from Chinese listed firms for the period 2012-2018, we provide new evidence that the intensity of non-executive equity incentives can reduce the likelihood of internal control weaknesses and improve internal control effectiveness. We also find that internal control weaknesses are more likely to be remedied in firms that implement strong non-executive equity incentive polices. Besides, we document novel results that employee equity incentives for non-executives can optimise the internal environment, improve the internal supervision system, and thereby reduce the operational-level weaknesses of a company's internal controls.
- Subjects
CHINA; INTERNAL auditing; LABOR incentives; LEGAL evidence
- Publication
Accounting & Finance, 2020, Vol 60, Issue 5, p4467
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.12653