The Influence Of The Corporate Governance Structure To The Internal Control Effectiveness

Internal control is very important to enterprise management, it measures the management level of modern enterprises and assures the sustainable development of enterprises. In recent years, financial scandals of domestic and foreign countries broke out, and the root is the failure of internal control, which underlines the important role of internal control in corporate governance. China also began to gradually build the construction of internal control, and has issued a series of internal control specifications for public companies, such as " Listed company's internal control guidelines of Shanghai Stock Exchange", " Listed company's internal control guidelines of Shenzhen Stock Exchange " issued on 2006, Internal Control Rule-Basic Rule jointly issued by the Ministry of Finance, China Securities Regulatory Commission, the Audit Commission, China Banking Regulatory Commission, China Insurance Regulatory Commission on 2008 and the supporting guidelines issued after then. All these indicate that our internal control building is gradual on the right track, and a sound internal control mechanisms have a sound corporate governance structure as the support, innovation and deepen of the internal control will promote the improvement of corporate governance structure and establishment of modern enterprise system, the two are interdependent and mutually reinforcing relationship. We began to research the internal control a little late compared with other countries, by constantly drawing on lessons from foreign research results, our research also formed many short-term results. At the same time, the studies on the relationship between corporate governance and internal control are less.For these reasons, this article analyzes corporate governance factors which influence the internal control through the improvement of the internal control system from the perspective of corporate governance and analyzes the influential factors which influence the internal control relatively large to achieve the company's business objectives and improve the company's operating efficiency, effectiveness, and ultimately enhance the company's competitiveness.This article includes the following four parts:The first part, describes the background and significance, points out the necessity of writing this article, reviews and summarizes the related studies of corporate governance and internal control. On this basis, makes arrangements for this chapter and research methods, and explores the inadequacies of this study.The second part details the related theory of corporate governance and internal controls, and analysis of the relationship between the two. After analyzing the relationship between corporate governance and internal control, this part describes how corporate governance structure influences the effectiveness of internal control from the four aspects of ownership structure, board, supervisors and managers.The third part, based on the theoretical analysis, select for data collection from Shanghai Stock Exchange, and do the empirical studies of corporate governance structure to the impact of internal control. Evidence is found that the largest shareholder and the effectiveness of internal controls is negatively correlated; Board is the construction of the internal control system, implementation and efficiency play a very important role, and the size of the board of supervisors and internal control showed no correlation; a direct incentive for executives play in practice a good role.The fourth part summarizes the empirical findings of the study and makes recommendations from four perspectives. The article points out the further research directions at the end.