Research On The Effectiveness Of The Corporate Governance Structure To The Internal Control

With the development of the socialist market economy, we begin to realize theimportance of internal control. It is a powerful tool to improve the efficiency of thecompany. Scholars from home and aboard are doing research on internal control fromdifferent angles in order to learn the influence factors of it. The ultimate goal of theresearch is to improve the effectiveness of internal control.The research on corporate governance structure and effectiveness of internal controlconstructed with theoretical analysis and empirical test. In the theoretical analysis section,the writer give the definition of the corporate governance structure and effectiveness ofinternal control on the base of review of the literature, then describe the influence causedby corporate governance structure on the effectiveness of internal control. In the definitionof the effectiveness of internal control process, effectiveness of internal control is dividedinto three parts on the base of internal control standards: goals of corporate performance,financial statements reliability and company law compliance. In the following part, thethesis gives detailed logical analysis and conclusion of normative research.In the section of empirical test, the thesis examines every normative conclusions oneby one. The study sample of this thesis is the2011cross-sectional data of Shanghai andShenzhen A-share listed companies. The characteristics of corporate governance structureis divided into three aspects: the shareholding structure and the owner’s rights and interests,board structure and senior management characteristics. The explanatory variables wereselected in accordance with the three aspects: ownership concentration, character ofcontroller, the proportion of shares of shareholders attended the meeting, the board size,the proportion of independent directors, the risk appetite of management, the totalremuneration of senior management and the chairman of the board is also the CEO. Byempirical test, the impact from characteristics of corporate governance structure on the effectiveness of internal control is different. The conclusion of the thesis is that it isfeasible to improve the effectiveness of internal control by changing characteristicscorporate governance structure.At last, the thesis gives some ideas about how to improve the effectiveness of internalcontrol by changing the corporate governance structure.