An Empirical Study On The Relationship Between The Risk Preference Of The Board Of Directors And The Quality Of Internal Control

Good internal control is an important guarantee for comprehensive business operation and management.The financial fraud cases caused by internal control failure are numerous,and a series of financial frauds have brought great impact on the international capital market,which has also brought great losses to the investors.In order to make the investors to regain confidence in the listed company,standardize the internal control of listed companies and strengthen the sense of social responsibility of listed companies,internal control of the related laws and regulations have been introduced,such as the United States the sarbanes act issued in 2002.The internal control of the financial statements of the enterprise as the accounting oversight and focus on the object.China formally promulgated the form a complete set of enterprise internal control guidelines from 2010,as the form a complete set of guidelines issued,our country enterprise internal control standard system is basically completed.The research of internal control has always been a hot issue in the field of audit research.Different from previous studies,this paper will introduce the concept of "risk preference" based on the characteristics of the board of directors,combining with the theories of "bounded rationality" and "risk preference".In this paper,through the establishment of risk appetite,a comprehensive evaluation index selection and A-share listed companies from 2014 to 2016 to analyze empirically the data,to discuss the relationship between the board risk preference with the internal quality control.Around the research topics in this paper from two aspects of the theoretical analysis and empirical research,based on the theory of corporate governance theory,risk preference and top ladder theory,this paper constructs the risk preference by the board of directors of the comprehensive evaluation index from the age structure,sex structure of the board of directors and asset structure level.As an alternative variable of internal control quality,the construction model uses Stata for empirical analysis.Through the empirical analysis in this paper,two important conclusions: one is the board risk preference exists significant difference to the quality of internal control,the board of the higher risk appetite,the lower the quality of internal control.Second,compared with non-state-owned enterprises,the risk preference of the board of directors of state-owned enterprises has more significant influence on the quality of internal control.