The Empirical Study On The Relationship Between Audit Committee Characteristics And Internal Control Deficiencies

The promulgation of America’s Sarbanes-Oxley (SOX) and China’s The SupportingGuidelines of Enterprise Internal Control makes the problems of enterpriseinternal control become a hotspot in research of financial management in recent years.Meanwhile, financial fraud cases of capital markets at home and abroad also expose thelack of the audit committee functions resulting big problems of the internal control inlisted companies.Therefore, committing to deficiency research of enterprise internalcontrol benefit reducing the internal control deficiency to protect the interests ofinvestors.On the basis of principal-agent theory, asymmetric information theory, the theoryof corporate governance and internal control theory, the paper proposes researchhypothesis and establishes the binary Logistics empirical research model around therelationship between listed company’s audit committee characteristics and internalcontrol deficiency. It explore three representative characteristics: independence,diligence, professionalism researching the relationship between these threecharacteristics and listed company internal control deficiencies with the Shenzhen StockExchange of144internal control deficiencies in listed companies in2012as researchsamples. Model results show that the independence, diligence and the professionalismof the audit committee both has effect on internal control deficiencies, but their impactis different. Independence to operational deficiencies of inhibitory effect is significantlygreater than designed deficiencies, while diligence and professionalism to designeddeficiencies inhibitory effect is greater than operational deficiencies, but the influenceof the professional is more significant. According to the above research conclusion, thepaper puts forward useful policy suggestions related to the modern enterprise of theaudit committee system arrangement.