Motivation, Essence And Implementation Of Internal Control Based On New Institutional Economics Perspective

Since the 1990s, many countries and organizations have issued internal control framework and guidelines in the world. One distinctive feature is that these laws and regulations both figured out that the internal control is no longer confined to the traditional narrow sense of accounting controls, and also no longer should be cencerned only in the field of accounting or auditing, but should be studied the internal control issues in a more broad perspective. The new institutional economics as a basic discipline is in the self-development and constantly changing, and it is closer to the realistic assumptions which make its theory deep into the various disciplines and fields. The development of the internal control theory should involve the new institutional economics theories which could extend the research, and this makes the internal control theory in accordance with the basic theory and more persuasive.For now, the theorists are arguring for a number of internal control theories in our country, and the reason for the failure is that they could not reach the agreement of the basic view of internal control, and these basic theoretical point of the view is precisely the basis of the internal control. Yang Xiongsheng(2011) also pointed out that'so far, all of the internal control studies only focus on the practices summarized, the theory lacks of a serious forward-looking'. For example, what is the real motivation of the internal control generated, what is the nature of the internal control, what is its theoretical basis, what is the most appropriate way to implement it and so on. The existing literature rarely involves issures or similar questions, so the system does not give the answer. Because of the problems are not fundamentally researched, so the current implementation of the internal control is reflected in a series of contradictions.In order to solve those problems, this paper is divided into five main parts in-depth to study based on the existed researches: The first part is Introduction. The existing internal control research perspectives are summarized and analyzed after pointing out the background and significance of this paper, and the rational reasons for this paper based on the new institutional economics perspective. This study points out the ideas, methods, frameworks and innovation.The second part is about the motivation of internal control. Study the motivation based on these two lines:investors and managers.The third part is about the nature of internal control. The essence of the internal control is the main line of the theory of internal control. This part conbined with the theory of the property rights to study.The fourth part is the way to implement the internal control. The best way to test and reflect the value of the internal control is the implementation and the good way will have an enormous impact on it, so the study will solve the problems such as'policies, under the measures'and'impossible to defend'and so on.The last part is the conclusions and policy recommendations for research.This paper summarizes the existing studies of the basic theory of internal control, and takes a deep discussion about the motivation, the nature and the conduction of the internal control, and proposes a solution to improve the system of the internal control in order to make up the lack of the study. The previous literature did not mention the game theory of the internal control. In addition, the use of the Property Rights Theory and the Institution Change Theory is the one of the innovations. But the conbination of the the new institutional economics and the internal control is interdisciplinary and the relevent studys are rare, so this study is basic and lack of demonstration and should be perfected further.