An Empirical Research On The Relationship Among The Implementation Of ERP Systems, Internal Control And Enterprise Value

During the twenty-first century, information technology has become a global trend. Especially in the global electronic wave, Core competitiveness of enterprises is invisible IT. With the growing popularity of communications technology and network technology, Enterprise Resource Planning (ERP) came into being. ERP system is mainly for the manufacturing industry, which integrates and manages material resources, financial resources and information resources. It centralizes purchasing, sales, finance, quality management and other functions, and fully achieves the optimal allocation of internal and external resources to enhance the competitiveness of enterprises. Today, ERP is an advanced management concepts and management methods have been widely accepted and recognized, brings huge profits for enterprises, and enhances the value of the business. But in enterprises which apply to ERP, internal control has had a dramatic change in more respect compared to the internal control before in the traditional environment. After the implementation of ERP, the focus of internal control turn human-control oriented into joint control of human, machine and Internet, which has a profound impact on internal controls and an indirect impact on the enterprise value. Therefore, this thesis presents the topic of "Empirical studies of ERP system implementation, effectiveness of internal controls and enterprise value" under this background, aiming to provide a meaningful reference about improving the internal control system of enterprises and enhancing corporate value through analysis the effect of ERP implementation on the effectiveness of internal controls and the value of enterprise.This thesis makes a further study based on collating and summarizing previous relevant literature about ERP system implementation, effectiveness of internal controls and enterprise value. In the theoretical analysis, I analysis the internal relations between ERP implementation and internal control, internal control and enterprise value, ERP implementation and enterprise value, manually collect a representative sample data of manufacturing industry, build multiple linear regression model to test hypotheses, draw conclusions of this study and put forward reasonable and feasible recommendations.This paper uses both empirical analysis and theoretical research studies, but mainly bases on empirical research. Listed companies in manufacturing are chosen as research samples, many sub-industries are included as well. This article uses regression model I to get the relationship between the four indicators of effectiveness of internal controls while ERP is used as dummy variable. Other factors which have influence on effectiveness of internal controls are got on the basis of previous literature and will be added to the model as control variables. The relationship between the four indicators of effectiveness of internal controls and explained variable-Tobin’s Q is concluded from regression model II while ERP is used as dummy variable. Other factors will be added as control variables as well. This paper adopts STATA12.0 software and Hierarchical regression analysis to test the three assumptions step by step.Through theoretical analysis and empirical test, this article has drawn the following conclusions:implementation of ERP and effectiveness of internal controls are positively correlated, the implementation of ERP can improve operational efficiency, ensure the reliability of financial statements and legal compliance.This study has some breakthroughs in research methods, the same time, it will enrich the research about the relationship among the implementation of ERP systems, Internal Control and Enterprise Value, which will provide more countermeasures and suggestions when manufacturing industry implement ERP.