Effects Of Board Characteristics Of Internal Control Audit Quality

In recent years, the capital market is active, while its rapid and stable development,accounting information distortion, internal control out of control have leaded a lot ofenterprises to collapse, the interests of investors cannot be guaranteed, the country sufferedhuge loss. As a corporate to prevent fraud and ensure economic security, the credibility andindependence of the auditors are questioned, as well as the audit report. Thus, thepractitioners and theorists pay attention to it. In April2010, the Ministry of Finance, theCommission, the Audit Commission, China Banking Regulatory Commission and ChinaInsurance Regulatory Commission jointly issued" Enterprise Internal Control Guidelines”,which requires auditors to audit financial reporting controls, specifically from2011,it beginsto be implemented in the territory and foreign companies listed, and for all Companies listedon the Main Board of Shanghai Shenzhen a-shares from2012. This event indicates thatChina begins to emphasize corporate internal control mechanisms as well as governing. As alink between shareholders and managers, The Board is the core of corporate. They make anddecide companies’ development strategies and play a supervisory role, while its effectivenesswill generate different needs. The purpose of this paper is to focus on the impact of the boardbackground characteristics to the internal control audit quality.First, according to game theory, based on supply and demand double dimension, thispaper selects internal audit fees and internal audit opinion to reflect the quality of internalaudit; Meanwhile, based on the senior echelons theory, it selects professional backgroundsand education level of board members, number of meetings, the ownership of IndependentDirector to analyze its impact on the internal l audit quality. Take the companies disclosedaudit quality report Since2011, we use Logistic model and multiple linear regression modelto jointly explore the impact of board characteristics on internal audit quality.The results of this paper are the professional background of the Board is relevant toInternal audit quality,but it is not notable; The academic background is positively correlate tointernal audit quality at the5%level; The proportion of independent directors is negativelycorrelated to internal audit quality at the10%level; Board meetings is significantly positivelycorrelated to the internal audit quality at the10%level; the pay of top three directors ispositively correlated to the internal audit quality at the5%level. While these conclusions areexplained, some recommendations to perfect the system of Board and improve the quality ofinternal audit are followed.