Empirical Analysis Of Chinese Financial Listed Companies’ Corporate Governance And Internal Control Effectiveness

Internal control is the most basic management method of modern corporation system and is a powerful guarantee for the sustainable development of enterprises. However, in recent years the domestic and foreign corporate fraud scandals have been revealed, many problems of internal control have been exposed, these make the world to rethink of the enterprise internal control system, and has also attracted the attention of Chinese government. In2008June, the Ministry of Finance and other five ministries jointly issued the " China-SOX", and the three guidelines issued followed constitute the "1+3" internal control theory system with Chinese characteristics.This article based on five internal control goals formulated by "China-SOX", analyzed the governance structure and internal control validity of the domestic financial listing Corporation, set the implementation effect of internal control as analysis standard, structure the internal control effectiveness index, then had an empirical research on the influence of the governance mechanism to shareholders meeting and the board of directors, incentive and restriction system to general manager and several other aspects to the overall effectiveness of internal control and the effectiveness of five internal control goals. Through the analysis of the financial listing Corporation data, this article come to the conclusion that:the number of board of directors meeting do not play an positive role in the effectiveness of internal control, it will conversely obstruct the sustainability and validity of the implementation of internal control system; the larger the company, the management level would usually have a corresponding increase, it will also increase the difficulty of management, reduce the efficiency of internal control implementation, thus affecting the effectiveness of internal control; a company with better growth potential always has better implementation of internal control system, and the effectiveness of internal control is also be well reflected.This article uses the empirical analysis research methods. By analyzing the relationship between effectiveness of internal control and corporate governance of financial listing Corporation, the purpose of this article is to find an effective ways to improve the internal control system of the company.The research on the relationships between internal control and corporate governance mostly are normative research, not much empirical research, and on the existing empirical research, the effective variables of internal control are mostly selected individually from internal control elements, because the whole internal control elements are an interconnected system, the simple sum of the elements may not represent of the overall effectiveness of internal control system. Therefore, in this article, using the implementation effect of internal control as weight, structure the internal control effectiveness index which can effectively measure the influence of internal control to corporate governance.