An Empirical Study On The Quality Of Internal Control Agency Cost And The Growth Of The Firm

After the China Gem Board was founded in 2009, the problems of the China Gem have been the focus of attention. The practice and developments of Gem markets abroad have shown that growth is the core of the Gem markets and the development of the listed companies on the Gem Board. The China Gem was officially founded in October, 2009. The main purpose of the China Gem is to provide available financing channel for the development of the small and medium-sized firms with rapid growth, high-tech entrepreneurs and start-up companies. It's an important financing platform for the independent innovation strategy of our country, and also a pivotal complement for the construction of the multi-level capital market system of our country.Since the Sarbanes-Oxley Act issued, the structure and effective evaluation of the internal control system has always been the focus of the theoretical and practical circles. Internal control is a kind of scientific corporate governance system. And the effective establishment and performance of it is a very important significance for the better management and development of corporations. We know it from the principal-agent theory that the investor as a client can only exert his influence on the management circle that act as agents but can't manage directly, which causes certain principal-agent contradiction. The contradiction can influence the benefit of the investors and the development of the corporations. Based on information asymmetry and information transfer theory, the improvement of the internal control quality can deepen investors' understanding of all the aspects of companies. Then agents can manage corporations effectively, which will finally make the listed companies develop better. All above make the growth of companies have a positive effect. The primary feature of the listed companies on the China Gem Board is its growth, which is not only the focus of the investors but also an important indicator for the government administration department to pick through and supervise the listed companies, even the foundation of building the Gem board. Combining the rapid growth of the listed companies and the feature of its high risk, discussing the relationship between the internal control quality and the growth of the listed companies seems quite important.On the base of theoretical research, this article firstly reviews and summarizes the research method and research result of the original related literature; taking the decision organization theory, the principal agent theory and the signal transmission theory as a support, this article analyzes the influence mechanism of internal control quality effecting the companies' growth, and lays a theoretical basis for the following demonstration analysis. Based on decision organization theory, listed companies, as a goal organized by various decisions, aims to get more profit. If the a listed company owns good internal control quality, investors can make decisions more precisely, distribute and make use of all kinds of resources companies have. In that way, the cost of organization operation can be lower an acceptable level, which produces positive influence on the companies' growth. Based on the principal-agent theory, the contradiction of the theory may cause adverse effect to the companies. However, a good internal control quality may weaken the contradiction; deepen the communication between clients and agents, supervise agents more effectively and finally effect listed companies positively. Based on the information asymmetry and the information transfer theory, a good internal control can make the internal information of the listed companies be transferred effectively, the decisions made by the board of directors be executed best. Therefore, a good internal control quality has an incalculable function to the normal operation of the companies. Effective disclosure of the external information can get more market reaction, the favor of the investors and more profit for the companies. Through the above two points, good internal control quality can make sure the information be transferred effectively, then improve the growth of the listed companies.On the aspect of demonstration, this article takes three key aspects( profitability, operational capability, development ability) as it's stand, and chooses many typical indicators such as net assets income rate, turnover ratio of total assets as the standard of judging the growth of listed companies in order to avoid the limitations brought by single indicator. In the measure of internal control quality of the listed companies, our country has made great progress recent years. The announcement of the Di Po China listed company internal control index indicates that the internal control quality has entered the era that the internal control quality can be quantified. This article takes the Di Po China listed company internal control index from 2012 to 2013 as the base to research the internal control quality of the listed companies, suggests a hypothesis and establishes multiple linear regression model to study the relationship of the internal control quality and growth of listed companies. Through the methods of qualitative analysis and qualitative analysis, I use the method of combining the descriptive statistical analysis, correlation analysis and regression analysis, and then conduct an empirical study on the relation between the internal control quality and growth of the listed companies. Finally, this article gets the study conclusion: the relation between the internal control quality and the growth of the listed companies is positively correlated. On the basis of the empirical results, this article will give relevant countermeasures and suggestions to perfect the internal control system of the companies in our country.