Research On The Effect Of Internal Control Quality To Investment Efficiency

The relationship between investment efficiency and internal control is the hot spot and focus in recent years for the scholars. Modern enterprise system, the imperfect of market, the existence of agency problems, make the investment decisions are not up to the most effective. Asymmetric information, agency problem and managers’ behavior have a formative influence on the investment behavior of the investors. Over-investment and under-investment happen frequently. The paper aims to explore the influence of internal control quality to the investment efficiency.In the paper, the study mainly on the date of listed company of northwestern provinces from 2010 to 2013. First, the paper elaborates three relevant theory, and defines the relevant concepts. Second, introduce internal control quality to the theory, analysis the role of internal control quality to the investment efficiency, from the three different angles such as agency, information asymmetry and managers’ behavior. Then, on the basis, put forward research hypothesis of the paper design the empirical model to verify the research hypothesis is in line with the theoretical analysis, through the data of the selected sample companies.In the paper, the empirical analysis has two parts: The first part, measure the quality of internal control through the analytic hierarchy process(AHP), the second part, it is through the descriptive statistics on the level of investment efficiency of listed companies, the whole sample is divided into two sample group, the investment shortage and excessive investment, through the residual model of Richardson, construct the regression model between the internal control quality and investment shortage and excess respectively. Using stepwise regression analysis to verify the relationship between the two. The conclusion is found that the ascension of ICQ can effectively inhibit the under-investment and the over-investment, and improve the investment level. It also found that enterprise business performance and growth opportunities have a little role of inefficient behaviors. Finally, on the basis of the research conclusion, the paper puts forward relevant policy suggestions, in order to improve the investment efficiency of enterprises.