Research On The Relationship Between The Effectiveness Of Internal Control Of Enterprises And Financial Performance

As an important step of corporate governance,internal control plays an important role in the establishment and realization of enterprise operation and strategic objectives.Regarding the role of internal control in the process of business management,it has always been a hot issue in corporate governance and internal control research.The success of enterprise management and operation is not necessarily the role of internal control,but the failure of enterprise management and operation is often closely related to the failure of internal control mechanisms.Therefore,for enterprises,how to establish an effective internal control mechanism is an important issue that enterprises need to study deeply in the process of operation and management.The establishment of an effective internal control system is of great significance to the reform and development of Chinese companies in the area of corporate governance.Since 2012,the "Internal Control Supporting Guidelines" clearly requires that listed companies in Shanghai and Shenzhen must disclose the internal control evaluation report and the internal control audit report at the same time.These two internal control reports measure the quality and effectiveness of internal control from the internal and external perspectives.Based on the two evaluation reports on internal control disclosed by listed companies in 2015-2017,this article takes the internal control deficiencies in the internal control evaluation report of the company and the audit opinions in the internal control audit report as the internal control effectiveness indicators.These two indicators can reflect the overall internal control design and operation of the enterprise.In addition,this paper divides the listed companies into large enterprises and small and medium-sized enterprises,and uses stata.15 statistical software to empirically analyze the influence of the effectiveness of internal control on the financial performance of different types of enterprises.The empirical results show that the effectiveness of internal control has a significant impact on financial performance in both large and small enterprises.Further research results show that,compared with large enterprises,ineffective internal control of small and medium-sized enterprises has a more serious negative impact on financial performance,and effective internal control is more conducive to improve corporate financial performance.This paper reveals that in terms of the effectiveness of internal control,different types of enterprises have different impacts on financial performance,which is conducive to encouraging and guiding various types of enterprises to further strengthen internal control and improve profitability and operating levels.