Research On Implementation Effect Of Internal Control Standards In The Perspective Of Financial Risk

The Internal Control Standard System has been built in 2010, including basic enterprise internal control norms and a set of enterprise internal control guidelines. As the system is completed, its implementation also gradually comes into practice. In 2011,68 domestic and abroad listed companies and 216 domestic listed companies took part in the pilot implementation of the system. The full scale implementation of the system started in 2012, the state-owned listed companies are enforced to implement, and other companies are encouraged to implement. In 2004, with the promulgation of enterprise risk management:the integrated framework, internal control get more and more attention in the role of risk management. And financial risk management is the core component of risk management. As the above background the purpose of this paper is to study the effect of the implementation of the internal control standard system and the effectiveness of internal control to financial risk.For the study purpose, state-owned A-share manufacturing listed companies are chosen as the research object, and the non-state-owned A-share manufacturing listed companies are chosen as the reference samples. And four years’ data of the research object and reference samples are studied. In this paper, the explained variable is the Altman z-score, which measures companies’ financial risk, and the explaining variable is Di Bo index, which measures the quality of internal control, and a series of control variables are selected depending on the factors of the financial risk. According to the results of Pearson correlation analysis and regression analysis, this paper found that the internal control has significant negative influence to financial risk, and the enforced implementation of the Internal Control Standard System is more effective in improving the effectiveness of the internal control.