The Research Of Financial Risk Abuout China’s Listed Private Enterprises Based On The Quality Of Internal Control

After more than thirty years of reform and opening up, private enterprises in China have become an important force in promoting and supporting Chinese economic growth.However, with the spread of the global economic crisis, in the face of increasingly fierce market competition and the impact of the unprecedented international financial crisis, the private economy in China is faced with many difficulties.Private enterprises have also exposed a lot of their own problems, particularly prominent is the company’s internal management issues, resulting in many private enterprises facing a financial crisis and the financial distress,if his situation is accumulated for a long time and cannot solve, finally to collapse and bankruptcy of enterprises is also happen from time to tome.So, how to improve the internal management of private enterprises and strengthen private enterprise risk awareness and the ability of risk resistance, has become people’s concern after the financial crisis. Internal control is an important part of the internal management of enterprises, so, in this paper, with the listed private enterprises in our country internal control as a starting point, studying the internal control mechanism on the influence of the perfect enterprise financial situation, carrying on the corresponding empirical analysis.When studying the relationship between internal control and financial risks of the listed private enterprises in China, this paper mainly adopts the combination of theoretical analysis and empirical research, as well as the combination of qualitative and quantitative research methods. Theory in this paper, the principal-agent theory, theory of limited theory and system theory are application. In the empirical analysis aspects, this paper slams the door from the financial indicators for enterprise financial risk causes of the traditional analysis method, however based on decomposition and quantitative of the internal control objectives of the Internal Control-Integrated Framework (strategic objectives, business goals, the report, compliance, asset security goals) to establish a persuasive comprehensive evaluation index of internal control quality as the empirical research part of the explanatory variables. Then use the altman’s[19]Z-Score analysis of reacting financial comprehensive level, the enterprise’s financial position are divided into three different levels, as the dependent variable of the empirical research part in this paper; based on632listed private companies in China for four consecutive years2008—2011of2532samples, using ordered-logistic regression model to make an empirical analysis of the enterprise financial risk in the fluence of internal control.In this paper, we found that the internal control quality and internal control of the five objectives, with the enterprise’s good financial situation gradually changed significantly positively, namely to promote the quality of internal control, to improve enterprise’s financial position.Level to achieve the goal of business objectives and the report to improve the enterprise financial situation has the most affection, strategic objectives and compliance to the enterprise financial status of target times, asset security target has minimal impact on corporate financial situation. The conclusion of this paper is not only beneficial to the research on internal control, but also a kind of research of the financial situation of listed private enterprises in china from the Angle of internal control quality, which I hope can cause each management authorities to reflect on the internal control implementation, effectively improve the quality of the private enterprise’s internal control, and strengthen the level of the enterprise internal management and avoid the enterprise financial risk, improve the enterprise’s financial position,improve economic efficiency, it would be to break through the deficiencies of the private enterprise internal control and promote the sustainable development of private enterprises, which has important practical significance.