An Empirical Study On The Efficiency Of Internal Control In Public-listed Company

The essence of internal control is a risk control mechanism, it is the overall control of an enterprise, the ultimate goal of internal control is to improve business management level and risk prevention ability. Good operation of internal control means that the company with high internal control efficiency. The efficiency of internal control is one of the significant factor affecting auditors risk, as well as audit model and audit efficiency.?Auditor changes are the result of the game between auditors and managements; it can deeply analyze the characteristics of enterprise based on the view of auditor change. However, the empirical?literatures that study?on?the?internal control efficiency?based on the perspective of auditor change? are rare.? So,? based on the close connection between internal controls and auditing, this paper investigates the efficiency of internal control in Public-Listed Company from the perspective of auditor change.Firstly, this paper takes a brief review of literature research on the efficiency of internal control from home and abroad. It achieves certain results on the abroad empirical study of internal control; but the main way to study the efficiency of internal control is normative research because of data limitations in our country. Then, Enlightenment from the abroad empirical studies is analyzed while the internal control information is required mandatory disclosure.Secondly, based on the essence of internal control and the close connection between internal controls and auditing, using Principal-agent theory and Signaling theory and risk transmission theory to analyze how the efficiency of internal control affect auditor change. Theoretical analysis show that the efficiency of internal control is one of the significant factor affecting audit risks, the lower of the efficiency of internal control, the more likely result in auditor change is.And then, the impact of the efficiency of internal control on auditor change is examined by empirical study method. We choose the listed companies from China's Securities Market in 2008 that have undergone auditor change as study samples, through matching the research and control samples one by one, and using of means test, median test and logistic regression, the research find: auditor change are negatively associated with the disclosure degree of internal control information and internal control departments that submit supervision reports. Contrarily, auditor change is positively associated with internal control weakness, but there is no statistical significance between auditor change and voluntarily disclose the auditor's internal control reports. We conclude that the efficiency of internal control has significant effect on auditor change, and the disclosure of internal control information has clear action of signal transmission.At last, on the basis of theoretical analysis and empirical study, combine with the problem of internal control, some advices are put forward: Regulate the disclosure of internal control, Improve internal supervision system, Strengthen audit supervision. What's more, we point out the future research direction after analysis the limitation of this paper.The innovations of this paper are: The essence of internal control is analysised from the internal control evolvement viewpoint; The effect of the efficiency of internal control on auditor change is systemic analysised; The empirical study on the efficiency of internal control in Public-Listed company in China, the result show that the efficiency of internal control has significant effect on auditor change.