Research On The Effect Of Multinational Corporations’ Internal Control To The Effectiveness Of Corporate Governance

As economic globalization increasingly strengthened, multinational corporations are becoming increasingly important in National economy and transnational operating has become an inevitable trend. However, Enron event, the case of Barings Bank, Singapore in aviation fuel and other events reflect that there are many problems in the management in large multinational corporations. When reflect on these issues, theorists and practitioners focus on internal control and the effectiveness of corporate governance. They believe that the key of above-mentioned cases is the defection of the internal control system and poor performance of corporate governance. The purpose of this paper is to study the relationship between the multinational internal control and the effectiveness of corporate governance by combining normative and empirical research methods, reveal their connection and then make effective recommendations for the development of multinational enterprises.Firstly, this paper clearly defines the internal control and corporate governance and summarizes the theories. On this basis, the author researches the theory of the relationship between multinational corporations’internal control and corporate governance by analyzing their same essential characteristics and summarizes their relationship. Secondly, an empirical study of the relationship between multinational corporation internal control and corporate governance the effectiveness is the core of the paper. The author chooses these quotas as elements of internal control, such as type of audit opinion, audit expense ratio, net profit margin, return on assets, inventory turnover, total asset turnover for consideration, the management fee rate. According to the regression analysis of the relationship between the quotas and the effectiveness of corporate governance, the author gets the relationship between the internal control elements and the effectiveness of corporate governance and also makes the conclusion that good internal control system is able to improve the effectiveness of corporate governance. Finally, the author makes reasonable recommendations according to the results.