An Empirical Study On The Relationship Between Internal Control And Corporate Performance-Based On The Contingency Theory

As the mechanism for corporate governance and risk prevention,Internal control has most significance to all companies and investors. After Sarbanes-Oxley Act, COSO report has released as a symbol, a wide range of study for internal control in the foreign rise. By contrast, five ministries and commissions issued the "Enterprise basic norms of internal control" as the guide, our internal control have begun. Today, internal control in the enterprise has been paid more and more attention, the search for effective internal control or improve internal control has become a hope from all sides. However, this hope leads to such an idea in internal controls studies: people always wanted to find a universal way: Let a "best"internal control can be generally applicable for everywhere and play a role in business to promote the goals. The facts show that this idea is wrong. There is no uniform application of internal control in the world; therefore, the internal control of contingency theory comes into researchers'perspective. Environment varied among businesses, this impact on the internal control was inevitable, to promote the construction and improvement of internal control, let internal control play its part for business goals, business should adapt it to the surroundings. To our business, what is the effect of environmental uncertainty factors on the internal control? What is the situation that internal control matches or adapts to its business? Can this adaptation or fitness have any effect on business performance?This paper selects 405 Shanghai-listed companies in 2008 as samples studied the impact from environment Uncertainty for internal control and analysis the fitness that internal control adopt to environmental factors and how this fitness effect on firm performance .We based on the contingency theory, constructed evaluation for internal control by the level of business goals has achieved as a standard. We also construct concluded environmental contingency factors. We concluded that: contingency factors from business environment have different effects on internal controls, particularly the uncertainty of environment has a negative impact on internal controls, and companies should focus on adaptability of internal control to the environment. Improving the adaptability of internal control to the environment in enterprises can increase business performance.