Research On The Level Of Internal Control Of The Company In Shenzhen SME Board

After the financial crisis, all kinds of organizations are strongly appealed by both the international and domestic economic situation to change their thinking, and to seize the good opportunity of world economic recovery adjustment and transition. With the enhanced complexity and uncertainty of market changes, it is hard to sustain the extensive mode of development, which is hoped by the all kinds of organizations in the past. And it is necessary to improve the internal management of the organization, establish and perfect the internal control risk-oriented system, a rainy day, to calmly deal with the organizational development process in the face of various risks. Thus, in2010five ministries including the Ministry of Finance, Securities Futures Commission, the Audit Commission, the China Banking Regulatory Commission and Insurance Regulatory Commission jointly issued the Enterprise Internal Control Guidelines. This event not only mark the official formation of a separate system of internal control system of norms, but also open the new process for the Company’s internal control construction in China.SMEs are very important microscopic principal in China’s national economy. By the end of2012, about5651million micro SMEs have been registered in the industrial and commercial administration departments across the whole country, which is more than99%of the total number of industrial and commercial registration. SMEs are the most dynamic elements of the economy, whose development promote the economic growth and activate the competition in the market. Meanwhile SMEs create a lot of jobs for the community and have become a driving force in technological innovation. However, the SMEs still face many problems and obstacles in the process of the development, which are in terms of abnormal huge financial pressure and backward management mode. Especially financing is the biggest "bottleneck" during development of small and medium-sized enterprises. The establishment of the SME board (text small plates) open platform of equity financing for SMEs, the development of fresh "blood" as a leader in the small and medium enterprises in the transport to promote the listed SME business reengineering and industrial upgrading, pulling regional economic development, and setting a good example for the development of SMEs.The operation and management quality of the SME board listed company (small plates) is relationship with the normal operation of the multi-level capital market in China, and also about the continued patency of the equity financing channels for SMEs. Internal control not only drive small board company to enhance the quality of their own management "engine", also provide good "template" for the SME internal control construction. Then how the effect of the "engine" running is, what factors led to its good run and continue to improve and enhance the quality and what factors hinder the improvement of the quality? This paper will focus on the internal and external environment, which affect the internal control, after all, the internal control practice development today has been relatively mature, very convenient "ism", but why the same internal control rules in some companies to implement, but only in some companies into ornate furnishings? The reason is very different due to the control environment. In this paper, a special group of small plates on the capital markets will be as the sample for the study, attempt to analyze the internal and external environmental factors that affect the small plates internal quality control, and try our best to find the conclusion that whether the external environment has played a stronger impact on its internal quality control or the internal environment is better to promote the upgrade of its internal quality control, and the reference value of the comments and suggestions are provided for the majority of the SME internal control environment construction.According to the center intent, in the first step, the paper will simple playback from a historical point of view about the development of internal control, which can find the closely relationship between the changes of the internal control and internal and external changes in the environment. The control environment is a macro basis of the company’s internal control, and plays the most fundamental role for the internal control construction and the improvement Special by analyzing the current system of internal control background; it finds that the largest institutional background for the small plate’s internal control is under the strict supervision. Found from the internal control development changes being the theoretical basis of this study, principal-agent theory, system theory and contingency theory.In the second place, by investigating the last five years literature if the internal control, this paper finds there is rare research outcomes standing the point of control the environmental. Even if the research carried out on the control environment, internal governance perspective, and for such control environment of special groups such as small plates is extremely rare. This perspective of this study is appropriate and the research value.In order to answer the two questions about what exactly is the status quo of the company’s internal control construction of small plates and what internal and external environmental factors affect factors this situation, this paper uses a large amount of data to analyze a small board development status of the company’s internal control. And the overall conclusion is that the small board company’s current level of internal controls on the whole is relatively reasonable in terms of the system construction, information disclosure, irregularities, or the feedback from the research institutions internal control of listed companies construction. And the paper summarizes the characteristics of its internal control construction and development.What the Internal control’s status and characteristics of small plates is has the direct relationship with the internal and external environment. Because of the complexity and diversity of the internal and external environment, it is necessary to define the control environment boundary. The ultimate purpose of internal control is to achieve the company’s goals, and then the internal and external factors affect the company’s goals constitute the control environment. In this paper, the internal and external environmental factors that affect the company’s goals were summarized and analyzed. From the view of small plates, the external environmental factors affecting the quality of internal controls include securities regulation, social supervision, market mechanisms, and regional economic and social process four companies operating stability; affect the quality of internal controls internal environmental factors include governance structure and characteristics, status of employees, executive incentive four aspects.On this basis, this paper provides the assumptions and variables selection and definition against the internal and external environmental factors internal level of internal control of small plates. By using the small plates2009and2010data, it verifies that the internal and external environmental factors on the level of internal control of the small plates. And further proof of the influence exerted by the external environment, the level of internal control of the small plates is greater than the impact of the internal environment imposed. Therefore, it should continue to strengthen the internal control of the construction of the external pressure in order to optimize external oversight. Meanwhile, through the improvement of the internal environment and the external pressure into the internal control construction and improve the power, it will achieve continuous improvement in the small board company’s internal control; enhance the quality of management of small plates. And by Conducive to the market of small plates of sustainable development, it promotes the development and growth of SMEs in China.The main innovations of this paper are listed as follows:1. Analyzing the SME board the company’s internal control status quo system and summarizing its characteristics.The current research literatures rare systematically study about the status of the small plate’s internal control. The researchers are more concentrated in the market effect of IPO under pricing of small plates, split share structure reform, corporate governance characteristics of small plates, small plates of information disclosure, small board and GEM comparison, the growth of the company’s small board and so on. With large amounts of data, this paper analyzes the status of small plate’s internal control and summarizes its characteristics.2. Theoretical deduction and empirical methods verifies the impact of the external environment on the level of internal control of the small platesIn a special environment for the development of small plates from the outset, the external environmental factors become an important driving force of the constraints of its internal control construction. By theoretical deduction, the external environmental factors that affect small board company internal control have four aspects of securities regulation, supervision, market mechanisms and regional macro-economic and social development process. This article uses data of small plates and chooses the alternative variable defines the external factors that affect the company’s internal control. And external environmental factors on the small board company’s internal control indeed had an impact empirical test methods, validation, and some factors also quite significant. There are no such researches in the past.3. Theoretical deduction and empirical methods to verify the internal environment of the small plates level of internal controlAlthough the external environment for enterprise internal control construction injects a good momentum of development, but continuing impact of small plates within the company is still controlled by the internal environmental factors. This article summarizes the factors that the small plates within the company’s internal control environment as the stability of the company, four aspects of governance structure and characteristics, employee status and executive incentive system. Studies assume that the same design of these four aspects of the internal control of small plates, select the relevant indicators instead of the internal environment factors variables, small board company data to an empirical test. Implanted in the design of the study, especially the educational background factors, the chairman of the board and staff education background produced a significant impact on small plate’s internal control.4. Analyzing the level of the comprehensive and interactive influence between the internal and external environmentWhen he internal and external environments are taken as a whole, the conflict is not generated between them. And significant can be found that they can eliminate the negative effects of each other on the internal control. This means that when the internal and external environment work together, there has a stronger effect to enhance the level of internal control. There can be also found that the internal environment is the fundamental factors on the internal control of small and medium-sized board company. But the internal environment’s effect is more apparent under the external pressure.For small plates, because of the rise is in the development stage, its own internal control of the construction of the power is inadequate, the experimental data also confirmed this. Therefore, it should first strict supervise from the outside of its internal control construction. Strengthen external pressure from giving full play to the direct supervision of the role of the stock exchange, the sponsor and CPA. Booting the small board of internal corporate governance mechanisms and incentives, shorting internal control external pressure into internal consciously powered, in order to accelerate the upgrade of the company’s internal control quality of the small plates. Such way not only conducive to the stable development of the multi-level capital market, but also advantageous to restore confidence in the capital markets and the unlisted SMEs also establish internal control building model to guide the improvement of the SME internal control environment.