Research On Internal Control Effectiveness Of The Listed Commercial Banks In China From The View Of Corporate Governance

Lisiting has become the path of reform and development of commercial banks in China. Most of huge commercial banks in China have listed. With the IPO registration system a\carrying out, more commercial banks are bound to being listed. Listed commercial banks have significant influence on China’s economy development with great significance. However, risks become increasingly complex, leading to listed commercial banks enhancing internal control with no time to delay. Because of internal relation of corporate governance and internal control, the dissertation focuses on research field in listed commercial banks’ internal control effectiveness from the view of corporate governance, to explore interaction of internal control effectiveness in different levels, and to reveal inner link of internal control with operation performance, so as to effectively syncretizing corporate gonvernace with internal control. It aims to putting forward with improving countermeasure of listes commercial banks’ internal control effectiveness.In this dissertation, the theory of listed commercial banks’ corporate governance and internal control is introduced, the connotation and structure of commercial bank corporate governance is also defined at first. It introduces theoretical basis of corporate governance from three aspects, namely principal-agent theory, stakeholder theory and incomplete contract theory, and introduces theoretical basis of internal control from internal control theory, risk management theory and system theory, so as to discriminate renlationship of listed commercial banks’ corporate governance and internal control Effectiveness.According to the introduction of theoretical foundation, this dissertation constructs the evaluation indicator system of listed commercial bank corporate governance and internal control on the basis of realistic principle, authentic principle, Comprehensive principle, metrizable principle and target principle. It defines three internal control effectivenesses of listed commercial banks, namely decision effectiveness, execution effectiveness and supervision effectiveness from the view of corporate governance, which finally gets listed commercial banks’ internal control effectiveness indicator system.This dissertation picks out 20 listed commercial banks as samples to obtain related data. Choosing profitability, safety and liquidity of operation performance as explained variables, together with decision effectiveness and execution effectiveness of internal control as explaining variable, and using external supervision effectiveness of internal control as regulated variable to form cross terms. According to regression analysis, empirical research is carried out to reflect internal control effectiveness’ s regulating action on operation performance. It verifies that three internal control effectivenesses significant influence on operation performance, including external supervision’s differential regulated influence on indicators of internal control’s decision effectiveness and execution effectiveness.In order to further verify, it completes the total evaluation of corporate governance and internal control of the listed commercial banks in China by the methods of DEA evaluation, clustering evaluation and grey correlation evaluation. the following conclusions are drawn:(1) DEA evaluation indicates that 10 listed commercial banks are non DEA effective, including Bank of China, Shanghai Pudong Development Bank and Huishang Bank. And 10 listed commercial banks are DEA effective, including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China. What’s more, 6 banks(30%) are at the state of diminishing returns to scale, and 11 banks(55%) are at the state of constant returns to scale. Besides, 3 banks(15%) are at the state of Increasing returns to scale;(2) the result of cluster analysis indicates that 20 listed commercial banks can be classified as 4 classes, namely large state-owned commercial bank, state-owned commercial bank & national-wide share equity commercial banks, national-wide share equity commercial banks & local commercial bank and local commercial bank. In addition, similarities and differences of different listed commercial banks’ internal control effectiveness are discussed;(3) grey relational analysis shows that indictors including total number of supervisors and the first ten greatest shareholders share ratio of internal control effectiveness haves greater relation with operation performance indicators from the view of corporate gonvernance.