A Study On Influence Of Bank Performance Based On Corporate Governance And Audit Quality

When the financial crisis which began from America spread all over the developed countries, the performance of corporate governance and internal control among banks emerging into the consideration of international institutions and governments. While the issue of corporate governance and audit quality, which is the main component of internal control, becomes a significant research topic for scholars. In recent years, the whole scale of China’s banks is expanding constantly, and the number of listed banks is growing, more people pay attention to operating results of banking. This paper specially focuses on corporate governance and audit quality and taking the cross-sectional data in 2000 to 2012 of listed banks as a research sample develops a system research. On the basis of existing research results, this research try to find out influence effects of corporate governance and audit quality on the performance of Chinese banks, and try to find out the special effects on China’s banking performance, aiming to enhancing the overall competitiveness of Chinese listing banks. Another research objective is to put forward scientific and feasible countermeasures and suggestions to contribute to improving the quality and the international competitiveness of China’s banking.This paper mainly adopts the research methods of induction and deduction and empirical research to develop relevant research. This research takes corporate governance and audit quality’s influence on listed banks’ performance as the research object, using literature review finding starting point -- choosing research method--carrying out an empirical test --efining research conclusion -- putting forward countermeasures and suggestions as a clue. with the special purpose of researching and Excavating factors that affect China’s banking performance, the research is carried out. This paper consists of seven chapters. The first chapter is the introduction, including research background, research purpose and significance, research content and main innovative points. The second chapter is literature review on impact research on bank performance, mainly including corporate governance and audit quality influence on the performance of the bank and comments. The third chapter is the statistical analysis of bank governance and audit quality of Listed Companies in China, mainly on statistical analysis of the overall situation on assets, equity ownership structure, board characteristics and audit quality. The fourth chapter is board of directors’characteristics, ownership structure’s impact on bank performance. It is an empirical analysis focuses on the characteristics of board of directors and ownership structure’s influence on the performance of the bank as well as the influence of the cross variables on bank performance. The fifth chapter is the relationship between of executive turnover and bank performance, mainly focuses on before and after the replacement’s effect on bank performance and the moderating effects of corporate governance variables are also tested and analyzed. The sixth chapter is on audit quality and bank performance, mainly on audit quality influence on bank performance and it is also an empirical analysis. The seventh chapter is the conclusion of the study and research implications.This study has the following several points’ findings:Firstly, highly concentrated ownership structure and large scale of the board of directors is not good for the promotion of performance in China’s bank listing Corporation. Secondly, institutional ownership and foreign shares has a positive effect on China’s bank performance. Thirdly, replacement of executives when bank performance is worse, will have a positive effect. Fourth, nature of equity plays a moderating role on influence of corporate governance on bank performance. Fifth, a lot of features of audit committee and scale and reputation of auditing company have a positive impact on bank performance. In conclusion, this study obtains the following research suggestions:firstly, appropriate board size guarantees bank performance and corporate governance. Secondly, multiple ownership structure such as institutional investors and overseas investors have active corporate governance power. Third, strengthen banking culture and executive turnover measures play a positive and effective role in corporate governance. Fourth, high audit quality plays an active effect in value creating and risk management. Fifth, governmental regulation needs to be reformed to enchance the marketing environment for improving the banking performance.