The Research On Reciprocal Relationships Between Corporate Governance And Internal Control Of The Corporations In SME Board

The small and medium enterprise (SME) is growing very fast after it built. In about two years, more than one hundred corporations have come into the capital market of small and medium enterprise board. Especially, these corporations of the listed SME have very outstanding operating performance which is more attractive than main board with high share price, high P/E, high exchange rate. The SME board is competitive to finance and get excellent resource. Meanwhile, the SME board corporations are mainly private corporations, but the phenomenon that the holding party has much more share than the second biggest shareholder still exists,and what's more, family corporations are very common. In some corporations, the chairman of the board has sovereign position and absolute shareholding. Under this share structure, there is no clear partition between the corporation governance group and management group, which has negative influence on the internal control and risk management. Therefore,for the corporations of SME board, decision system and control system should be improved.The research in this paper is under this background. Corporation governance and internal control is important topic for discussion for the listed SME, so this thesis researches the correlation between corporation governance and internal control system with demonstration method. From the view of the mutual dynamic relation, the research develops for two respects, the influence that the factors of corporation governance have on the internal control and the influence that the factors of internal control have on the corporation governance. Principle components method and regression analysis are applied with many representative index variables.In the thesis, quantitative analysis and qualitative analysis combine and meanwhile, criterion analysis and demonstration research are both applied. The thesis summarizes the academic relation between corporation governance and internal control system based on the status of the SME board and the same essence characteristic for corporation governance and internal control system. Then principle components method and regression analysis are applied to analyze the correlation and some valuable conclusions are gained. The conclusions in this thesis will have great value for thorough understand and analysis of the SME board and the corporations in the listed SME.