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http://dx.doi.org/10.15207/JKCS.2020.11.2.207

The Effect of the Quality of Internal Accounting Control System on Executive Compensation : Focusing on the moderating effects of corporate governance  

Jung, Woo-Sung (School of Business Administration, Busan University of Foreign Studies)
Publication Information
Journal of the Korea Convergence Society / v.11, no.2, 2020 , pp. 207-214 More about this Journal
Abstract
The objective of this study is to analyze the effect of the quality of the Internal Accounting Control System(IACS) on Executive compensation, and to determine whether this relationship depends on the effectiveness of corporate governance. For the analysis, 6,343 firm-year data listed on the Korea Exchange from 2011 to 2016 were used. The results are as follows. First, Executive compensation was decreased in companies with low quality of IACS to provide a penalty for management. Second, the negative relationship between the weaknesses of IACS and Executive compensation was found to be strengthened when the corporate governance was effectively operated. These findings suggest that information about the quality of the IACS can be usefully used to reasonably identify the executive compensation policy, and that corporate governance needs to be operated more efficiently.
Keywords
The quality of the Internal Accounting Control System; Weakness; Executive compensation; Penalty; Corporate governance;
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Times Cited By KSCI : 4  (Citation Analysis)
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