Government Audit,Internal Control And Corporate Financialization

In recent years,China’s economy has shifted from high-speed development to highquality development.Economic globalization and world financialization have continued to deepen,and the economy has gradually emerged as a "corporate financialization" trend.The resulting rapid growth in investment returns.Although financialization can enable enterprises to obtain high investment returns in the short term,in the long run,it increases the risk of business operations and is not conducive to the sound development of the country’s real economy.As the "immune system" in the national governance system,government audit has been auditing some central enterprises since 2008 and publishing the audit results on the official website.So what is the impact of government auditing on the degree of financialization of state-owned enterprises? What is its impact mechanism? This paper studies these issues.Aiming at the emerging hot issue of corporate financialization.This paper starts from the perspective of internal control,uses the audit results announcements issued by the National Audit Office between 2010 and 2020,and takes my country’s central enterprises and their controlled listed companies as samples to construct empirical evidence.A regression model is used to explore the correlation between government auditing and the degree of financialization of central enterprises.The conclusions of this paper are as follows:(1)Government auditing can significantly inhibit the financialization of central enterprises.By supervising and evaluating the legitimacy,compliance and effectiveness of business activities carried out by state-owned enterprises,the degree of financialization of enterprises can be effectively restrained.(2)Government audit can restrain the financialization of enterprises by improving the quality of internal control.Government audits force enterprises to improve their internal governance environment and improve their internal control mechanisms by publishing audit results announcements,and the improvement of internal control systems promotes enterprises to create a good control environment and more effective internal supervision,thus reducing the degree of financialization of enterprises.(3)Further group study found that when the information transparency is low,the marketization process is low,and the media attention is high,government auditing has a more significant inhibitory effect on the degree of corporate financialization.It can be seen that the financialization of enterprises is not only affected by the internal environmental factors of enterprises,but also by external supervision and external market environment and other factors.(4)In terms of economic consequences,this paper finds that after government auditing promotes the reduction of the degree of financialization of nationalized enterprises,the degree of earnings management of central enterprises also decreases significantly.The degree of corporate financialization plays an intermediary role in government auditing and earnings management.Finally,based on the empirical results,this paper puts forward targeted construction suggestions,including strengthening government auditing efforts and improving the level of internal control of enterprises and other related measures.The research of this paper provides a theoretical and empirical reference for the research on the impact,action mechanism and economic consequences of government auditing on corporate financialization,and provides a reference for real enterprises to moderately participate in corporate financial investment activities and correctly guide enterprises to develop into the real economy.