Research On The Relationship Between Corporate Governance Of Listed Companies And The Internal Audit

In modern management theory, the internal audit is an essential component of the overall corporate governance structure. Through the supervision and evaluation of business activities, to promote the company’s operations and each management link smoothly and efficiently, so that corporate governance has been optimized for greater. At the same time, corporate governance is a institutional environment which the internal audit functions are played by. Each characteristic structure of corporate governance, to some extent, affects the work efficiency and quality of the internal audit activity. If the corporate governance structure is not perfect, it will affect the internal audit function, which cannot guarantee the authenticity of the company’s financial reports and other related information, and then increase the possibility of being issued non-standard audit opinion.Compared with western countries, the research of internal audit in China started late, the constant exposure of some of the financial scandals to the booming stock market brought a lot of shadow, and through analysis of these cases, we found that internal audit work is not place or its supervision is not enough, which is one of the important factors have caused the scandal occurred. Therefore, issues such as how to improve the quality of internal audit work in the corporate governance environment, thus ensuring a better service to its corporate governance process, which is still in the exploratory stage.In this context, the relationship between corporate governance and internal audit conducted in-depth research is necessary. For this purposes, through the combination of normative and empirical methods, the essay on the specific relationship of corporate governance and internal audit conducted research. On the basis of a comprehensive theoretical analysis, through the establishment of binary classification logistic regression model, I contacted a detailed analysis on the the specific relationship between corporate governance and internal audit. And I select eight variables to express the corporate governance structure. There are the the size of the board, general manager and chairman as one,the proportion of independent directors, independent directors participating in the meetings, scale of board of supervisors, degree of checks and balances between the top 10 shareholders and management equity ratio, then By the analysis to get the following conclusion:the separation of chairman and general manager positions, set up a separate special audit committee, the higher the proportion of independent directors, appropriate lower managerial ownership and higher degree of checks and balances between the top 10 shareholders will bring a higher quality of internal audit. No obvious correlation between the size of the board, the board of supervisors and quality of the internal audit.By analyzing the internal governance factors that have effects on he quality of internal audit, finally puts forward effective measures that can improve the corporate governance mechanism and to improve the quality of internal audit through four angles which are the characteristics from the board of directors and board of supervisors, equity structure, internal audit system itself so as to form a virtuous circle between the two.