Empirical Research About The Influence Between The Effectiveness Of Internal Controls And Enterprise Value

In May 2008, China promulgated the standards of corporations'internal controls, it learned COSO internal control frameworks and rest on our current. The all listed companies implement this rule from July 1, by 2009. Management should make internal controls for self-evaluation, The self-evaluation reports should be disclosured and it should be comply with the required. CPA should give the self-evaluation reports an audit opinion. Before 2009, there were some scholars to research the internal controls in theory, statistics, empirical, and so on. The general conclusion is that the internal controls in china's enterprises were invalid, the managers didn't realize the importance of internal control.2009 is the first year of fully implementing the internal controls. This paper choose three indicators to measure the effectiveness of the internal controls, they are:The organizations' operating efficiency and effects, the audit opinion of annual report, whether to comply with laws and regulations. I choosed the data published by 2009 to detect the implementation effect of internal controls, and tested their impacts on corporate value. The purpose is improving the management emphasis on internal controls, and making the company to implement and optimize the internal control voluntarily.This paper describes and analyzes the theoretical basis for internal control, enterprise value theory, the theoretical basis for Combination of internal control and enterprise value, and the interaction between the internal control and the enterprise value. I explained the interaction between internal control and enterprise value from the theoretical. On this basis, I designed three hypotheses, designed the dependent variable, three independent variables, and three control variables. Then I collected data, builded the model. After analyzing these data, I got the conclusion of the research. The main conclusions are:establishing internal control system can help to improve the quality of external reporting, and ensure enterprises follow the laws and regulations. The efficiency and effectiveness of management may have positive influence on the enterprise value significantly. The audit opinion and the compliance with laws and regulations have a negative impact on corporate value. Based on these conclusions, I make some thorough analysis in this paper, and put forward some suggestions of optimization internal control. Firstly, Enterprises should improve their own governance environment. Secondly, to establish a comprehensive and effective implementation the internal control system. Thirdly, the staff play an active role in internal control system. Fourthly, Strengthen supervision from the external audit and law.