Research On The Failure Of Internal Control And Related Party Transactions Of Listed Companies

In order to achieve the company’s sustainable development goals,company shareholders expect management to do good corporate governance under the concept of modern enterprise management,and internal control is an important means widely used by company management in corporate governance.When a company has difficulty in financing,in order to allow the report data to convey stable business information to the outside,at the same time,the management will tend to conduct earnings management for the company due to its own performance evaluation,company image and other factors.Transactions are a means that management often uses.In addition,as shareholders of listed companies,especially large shareholders who are not listed,in the process of expanding the scale of enterprise development,due to restrictions on financing channels,they also have incentives to obtain benefits or funds from the side of listed companies through connected transactions.In private enterprises where internal control has failed,management lacking internal supervision may make unfair or fictitious connected transactions in order to whitewash performance.Large shareholders who urgently need funds will also find ways to occupy listed company funds through unfair or fictitious connected transactions One of the problems of the aforementioned behavior in listed companies is the distortion of financial statement data.In this regard,relevant users of financial statement information such as external regulatory units and investors cannot know the real situation of the enterprise,which in turn affects the regulatory measures or the next investment behavior of the enterprise.This situation further weakens the company’s external regulatory power,and it is not conducive to the company’s restructuring of internal control mechanisms,which will make the company fall into a vicious circle.The company will not be aware of the company’s operation until the company’s operational crisis and governance level.This article reviews the literature on the motivation and economic consequences of internal control of enterprises,as well as the motivation and influencing factors of corporate related transactions.It is found that so far,the research related to internal control and related transactions has achieved great achievements,but the research There are relatively few related-party transactions in private enterprises when internal control fails.This article starts with the disclosure of internal control related information of domestic listed companies from 2013 to 2018,and summarizes and analyzes related-party transaction data in the same period.It is analyzed that Chinese companies themselves hope to strengthen internal control and related-party transaction management and control.The awareness and measures of compliance management and control of corporate governance are still inadequate,and they face greater risks in their daily operations,in order to summarize the current problems of internal control and related party transactions of private enterprises.According to the relevant regulations issued by regulatory agencies such as the China Securities Regulatory Commission,the Shanghai Stock Exchange and the Shenzhen Stock Exchange,internal control and related party transactions have their own definitions and classifications.The impact of internal control on related party transactions.By using the above theory of internal control and related party transactions,combined with the case company’s external announcements and annual reports,this paper analyzes the current situation of the case company’s internal control and related party transaction management and control,and believes that the case company still has such financial activities as business activities.、 Guarantee and other deficiencies,there are also deficiencies such as risk management and information disclosure in the internal control organizational structure,failing to make a risk judgment of major related party transactions and timely and complete disclosure.Finally,in response to the problem of non-fair related party transactions when the internal control of the case company fails,suggestions are made to improve the internal control construction and related party transaction management and control.Through research,this article believes that if our private enterprises want to continue to develop healthily,we must improve the internal control system and related party transaction control measures.Specifically,private enterprises should strengthen their internal control to standardize their corporate governance structure,establish a system to assess potential risks,take necessary measures to ensure the control of operational activities,improve information flow channels,and implement necessary measures to ensure effective monitoring.At the same time,the research on the related party transactions of private enterprises should be based on the internal control construction of private enterprises,and the internal control system of private enterprises should be improved to better control the related party transactions that are harmful to the enterprise.At present,compared with state-owned enterprises,due to problems such as imperfect internal control organization,inadequate risk identification and prevention,and lack of internal and external supervision and evaluation,private enterprises have greater risks in their daily operations.Therefore,the study of the case company’s internal control failure and related party transactions on the one hand is conducive to promoting the case company to improve its own internal control construction and related party transaction management and control,and on the other hand to the internal control construction and association of private enterprises and even state-owned enterprises in China Transaction management provides a point of reference and perfect ideas.