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Government accounting supervision and excessive perk consumption of executives: Evidence from China

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  • Pan, Di
  • Chen, Wenchuan
  • Zhang, Jinjin
  • Fang, Hongrui

Abstract

This paper investigates the effect of government accounting supervision on executives’ excess perk consumption in the context of China. We find that government accounting supervision can inhibit excess perk consumption of inspected firms’ executives. The result of path analysis supports the mediating role of internal control, which has significantly improved after the government accounting inspections. The impact of government accounting inspection is more pronounced in state-owned firms and firms whose inspection results are disclosed with details. Our finding provides a plausibly causal effect of government accounting supervision on executives’ excess perk consumption with the staggered strikes of the inspections.

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  • Pan, Di & Chen, Wenchuan & Zhang, Jinjin & Fang, Hongrui, 2023. "Government accounting supervision and excessive perk consumption of executives: Evidence from China," Finance Research Letters, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:finlet:v:57:y:2023:i:c:s1544612323005111
    DOI: 10.1016/j.frl.2023.104139
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    Cited by:

    1. Yang, Ziying & Wang, Bo & Huang, Li, 2024. "Eat, drink, entertain, travel? The impact of air pollution on excess perks — natural experiment evidence from COVID-19," Finance Research Letters, Elsevier, vol. 62(PA).
    2. Wu, Jinghua & Liang, Yanping & Liu, Wei, 2024. "The dark side of corporate digital transformation: Evidence from excess perk consumption of executives," Finance Research Letters, Elsevier, vol. 61(C).

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