A Study On Management Power, Internal Control, Investment Efficiency

No matter is the state-owned enterprise or the non- state- owned enterprise, the investment activity plays an important role in the development of the enterprise. Therefore, the investment decision of the enterprise also received many attention, because the problem of the agent and the existence of the information asymmetry, the objectivity of the investment decision-making is questioned. In modern enterprises, the phenomenon of insufficient investment is particularly serious. In 2008 in China according to the Sarbanes- O Mike Sri Act(SOX), issued by China Sox(C-SOX act). In this context, the internal control can play a role in improving the efficiency of non efficiency investment? Can the internal control play a role in improving the power of management? Good internal control can play a role in improving the relationship between management power and inefficient investment?Based on the above problems are proposed, this paper to Richardson’s investment model as the basis, select the Shanghai A-share 2012-2015 data management power, internal control effect on investment efficiency is studied, and the internal control is how to improve the management of power efficiency of investment effect. The study found that: in the whole sample management authority and investment efficiency was negatively correlated. Internal control and investment efficiency are positively correlated. Under the internal control system of different advantages and disadvantages, the influence of management authority on investment efficiency is different. Reasonable internal control system can restrict the excessive expansion of management power, avoid the excessive power of management over the internal control, and then affect the level of management power to investment efficiency. This article draws the following conclusion: in the internal control imperfect enterprise, the management authority will be bigger, more likely to lead to the non efficiency investment behavior, thus will aggravate the investment insufficiency or the investment excessive phenomenon. On the contrary, in the internal control system to improve the enterprise, the management of enterprise resources and free investment or investment in the situation will be controlled.