Study On The Impact Of Equity Structure On The Inner Control Effectiveness Of China Listed Companies

The ownership structure and the effectiveness of internal control are not independent of each other,but closely interrelated.As the basis of its property rights,the ownership structure reflects the obligations and rights related to enterprise interests.It not only plays a decisive role in the distribution of corporate control,but is also decisive in the operation of management mechanism.The ownership structure has a decisive impact on the management of listed companies.The behavior orientation of the management is largely subject to the ownership structure,and the behavior of the management is closely related to the information disclosure of the listed companies' internal control,while the level of internal control is also affected by the management level.Therefore,a reasonable ownership structure contributes to the companies' management and internal control,thereby enhancing the company's value in the end.Research of this thesis is an effective supplement to the existing research and improvement.This research selects updated data to verify the accuracy of the relationship model between ownership structure and internal control effectiveness,which has enriched the studies on internal control and its related theory for Chinese listed companies.From the perspective of corporate governance structure,this research has further enhanced the equity structure of the theoretical connotation of internal control effectiveness influence mechanism,which offers theoretical references for related research areas,also provide the theoretical guidance for listed companies to establish a sound system of internal control.In practice,it can guide the enterprises constantly improve the internal control system,Thus,it is helpful for listed companies to improve business performance and enterprise value.Therefore,taking the enhancement of the effectiveness of internal control in listed companies as the research target,based on the equity structure of listed companies this perspective,this thesis uses various research methods,such as literature analysis,statistical description method,factor analysis,multiple regression analysis and structural equation model method,to systematically analysis of the ownership structure and the present condition of the internal control of listed companies in contemporary China.This study builds an evaluation model of the effectiveness of internal control the listed companies in our country,analyzes and expounds the mechanism of action between ownership structureand internal control effectiveness and influence relations,established theoretical model of the impact of equity ownership structure on internal control effectiveness in listed companies in our country.This research employs the panel data of listed companies in China to verify the relationship between the ownership structure of listed companies in China and the effectiveness of internal control,and then put forward countermeasures and suggestions to improve the effectiveness of internal control of listed companies in China.In general,this thesis has achieved the following research results:Firstly,it is found that the relatively scattered mode of equity is common among listed companies in China.The equity restriction of listed companies is being strengthening.Most companies hold tradable shares,and it shows an increasing trend.Abundant internal and external communication,good business management and continuously-improved supervision mechanisms are advantages of such companies,while their governance structure and information disclosure should be better optimized.Secondly,an internal control effectiveness evaluation model is constructed,including eight indexes of the following four dimensions: business dimension,reliability dimension,compliance dimension and security dimension.This model calculates the scores of the internal control effectiveness of such companies.Thirdly,it is proposed that the impact of ownership structure on the effectiveness of internal control is achieved through corporate governance.The governance structure can be divided into an external governance structure and an internal governance structure,which have a combined impact on the effectiveness of internal control.The external governance structure is mainly measured by the equity balance.The mutual checks and balances of external equity are the main forms to promote the effectiveness of internal control.The internal governance structure is mainly measured by equity concentration and equity attributes,both of which can affect the effectiveness of internal control.A proper ownership structure helps to improve the governance structure,thereafter,improving the internal control effectiveness.Fourthly,a positive correlation between the concentration of ownership and the effectiveness of internal control is presented.With an increasing equity concentration,equity balance,ownership ratio of the companies' executives,the internal control effectiveness increases.While the relationship between the equity property and the internal control effectiveness is not obvious.By using the structural equation model method and path analysis method,it is verified that the ownership structure has a significant influence on the effectiveness of internal control.This effect is transmitted through corporate governance,which is embodied in the three dimensions of equity structure: equity concentration,equity balance and equity property.Finally,some suggestions for improving the effectiveness of internal control of China's listed companies are put forward.From the perspective of the internal governance,this thesis calls for an improvement of the internal control system,an optimization of the ownership structure,diversification of shareholding entities,and full-performance of the incentives of equity.And from the perspective of the external market environment,it is necessary to further improve the capital market and improve the shareholders' rights protection system.At the same time,the research has also made innovations in the following aspects: first,this thesis has a more in-depth explanation of internal control and its mechanism of action,and also improves the effectiveness of the evaluation index system of internal control.Secondly,this thesis deeply analyzes the mechanism of ownership structure on the effectiveness of internal control,and constructs the transmission model on the theoretical relationship of ownership structure-corporate governance-effectiveness of internal control.Third,this thesis puts forward countermeasures and suggestions to improve and optimize the ownership structure of listed companies in China and improve the effectiveness of internal control,which provides theoretical guidance and practical reference for Chinese listed companies to improve the effectiveness of internal control.