Effectiveness Evaluation And Empirical Study On The Internal Control Of Listed Companies

The effectiveness of internal control as the object of corporate internal control evaluation, is the degree to ensure that enterprises establish and implement internal control system to achieve corporate control objectives can provide. Therefore, the effectiveness of internal control of listed companies has a crucial role in promoting, whether the healthy development of China’s capital market, or the orderly operation of the enterprise itself. In this paper, from the perspective of comprehensiveness, importance and objectivity, internal control effectiveness index comprehensive evaluation model has been established, and go on the effectiveness of internal control of listed companies in China empirical research. Empirical research from the ownership structure, governance and reputation mechanisms layer three aspects, find out the effectiveness of the internal control factors which have significant impact. More comprehensive and profound understanding can be gained by this research. Addition, the paper can help the gradual improvement of our internal controls for a theoretical reference.Firstly this paper describes the background and significance of this paper Systematically, and domestic and foreign literature on internal control rating and internal control factors were reviewed to determine the research methods and technology roadmap. Then defines the concept of internal control, internal control evaluation and a detailed description of the internal control evaluation role. Then elaborate the related internal control theory and analysis, Control Theory, systems theory, information theory and agency theory perspective. Based on a comprehensive theoretical background of internal control evaluation index, paper puts forward the economic analysis. The third part of the contents is constructing validity of the comprehensive evaluation model. Defining the effectiveness of internal control index evaluation, then puting forward the principle of internal control evaluation, including comprehensiveness, the importance and objectivity. The effectiveness of internal control evaluation system is divided into goals, subjects, objects, methods and Indicators. Calculate the index weight to establish a comprehensive evaluation of the mathematical model of comprehensive evaluation of the effectiveness of internal controls. Finally, select the 2011-2013 Shanghai A-share listed companies as samples of China’s listed companies to do the effectiveness of internal control descriptive analysis and evaluation grade. The paper hypothesizes form ownership structure, governance and external governance structure layer three hypotheses and empirical research establish the mathematical model, followed by descriptive statistical analysis, correlation analysis, regression analysis and stability testing. So,we draw the following conclusions: 1) the effectiveness of internal control evaluation results show that 58.87 percent of listed companies is in general effective internal control level, indicating that the level of internal control of listed companies is still in its infancy, development is still long way to go. Fortunately, nearly three years of data show that the comprehensive evaluation index are steadily every year. 2) Datas of three yers have shown that proportion of shares hoding by big shareholders, salary of directors, supervisors, the type of audit opinion on the effectiveness of internal control with the index showed a significant positive correlation. Supervisory Board size, whether are "ST" with effectiveness of internal control index show a significant negative correlation. There are’t any significant correlation about other indicators upon the effectiveness of internal control index.