Empirical Study Of The Impact Of Board Governance On Internal Control

Reasonable internal control system and scientific board governance structure is the key to survive and develop in the market for enterprises.The Board is the primary internal control environment factor,responsible for the establishment and implementation of internal control,and good internal controls help to improve the efficiency of board governance of listed companies.Such as the U.S.Enron bankruptcy, World Com financial scandals and the huge loss of China's CITIC Pacific,Wuliangye related party transactions and others,these events have highlighted the internal control weakness and failure and the lack of effective board governanc.These problems urgently requires our board of listed companies improve governance,and strengthen the internal control of listed companies.In the international community,the three objectives and five elements of COSO theory has constructed the internal control system framework,which became the international internal control theory of the most authoritative research.In 2008 China has recently promulgated the"basic norms of internal control"and other documents,which make enterprise internal control into a legalized track,but in reality the enterprise internal control invalid phenomena are very serious.Therefore I believe that the research on Board Governance and Internal Control,both in theory and in practice has important significance.This paper on the basis of theoretical analysis,using 2005-2009 Shanghai A-share listed companies as samples,regression analysis of the effectiveness of internal control.The research focus on the effectiveness of internal control of listed companies in Inner Mongolia and have a comparative research and analysis.Paper is divided into four parts.The first part is the introduction, including the research background, the research purpose and meaning, research methods and content, and research framework. The second part is the theoretical analysis and review section, using agency theory,stakeholder theory and contract theory as the basis,to analyze the relationship between board governance and internal control,and then review and evaluate the domestic and foreign relevant research literature.The third part is the empirical research part of the Shanghai Stock Exchange listed company,take 206 listed companies as sample,using empirical research methods, and study the influence on Board Governance on internal controls.The fourth part is the part of Inner Mongolia empirical study of listed companies, the use of empirical research methods to study the 17 listed companies in Inner Mongolia, Board of Directors Governance impact on the effectiveness of internal control.Finally, empirical studies have concluded that: the board size and effectiveness of internal control was significantly negatively related, the establishment of appropriate size of the board is preferably not more than 11 people; proportion of independent directors and the effectiveness of internal control are related but not significantly, strengthen independent directors.The influence of the board, independent directors do not be taken as the reputation of punishment measures;Directors ownership negatively related to the effectiveness of internal control, directors should improve the incentive mechanism; Independent directors background and the effectiveness of internal controls significant positive correlation,it should be Concerned about the background of independent directors.