On-the-job consumption, internal control quality, and corporate performance

Abstract

The phenomenon of on-the-job consumption by management generally occurs during company operations, and has become a hidden means of corruption by management. This study collected data on non-financial companies listed on the Main Boards of the Shanghai and Shenzhen stock exchanges from 2009 to 2018. By analyzing the relationship between internal controls, on-the-job consumption, and corporate performance, this study examines whether internal controls can mitigate the impact of such consumption on company performance. Through quantitative analysis, the study finds that in-service consumption has a negative relationship with company performance, and that internal controls play a large moderating role between on-the-job consumption and corporate performance. The study also provides theoretical and empirical evidence to advocate for internal control regulations and related policies that better prevent and supervise the on-the-job consumption behavior of listed company executives.. © 2021, Success Culture Press. All rights reserved.