A Study On The Internal Control System Of Chinese Listed Company-the Empirical Study On Manufacturing Listed Companies

Internal control system is an important part of corporate management, has a major impact onthe survival and development of enterprises. In recent years, a continuing financial scandal hasalso exposed that there are still many problems in the internal control system. Therefore, China ispaying more and more attention to the construction of internal control system, Chinese listedcompany regulatory agencies and other relevant departments (including the Securities andFutures Commission, Ministry of Finance, China Banking Regulatory Commission CIRC), haveintroduced a number of laws and regulations related to internal control, to give guidance for thechaotic management of our internal control system. Basic Norms of Enterprise’s Internal Controlis jointly issued as a guidance of internal control of listed companies in2008which clearlypointed out the significance of the establishment of the internal control system. In2010, therelevant departments again issued jointly the supporting guidelines on the Basic Norms ofEnterprise’s Internal Control issued in2008and reiterated that listed companies shouldimplement.As Chinese listed companies have a late start in the development compared to foreign listedcompanies, there are many defects in the understanding and concrete practice of the internalcontrol system in the daily operation and management of enterprises, leading to the status of theinternal control system can’t meet the requirements of regulatory authorities. This paper attemptsto explore the root of the problem by analyzing the relationship between the main factorsaffecting the efficiency of internal control and the overall quality of the internal control system,and provide useful suggestions to improve and enhance the overall quality of the internal controlsystem.This article first reviews and summarizes the previous literatures and related researches ofthe internal control system; Secondly, comprehends and recognizes the definition and the courseof development of the internal control system, and evaluates the overall quality of the internalcontrol system from the concept of internal control. Then collects data from listed companies inShanghai and Shenzhen stock and RESSET financial data base and researches into the relationship between the internal control and it is influencing factors empirically, based ontheoretical analysis of the internal control and its influencing factors, and make recommendations.Finally summarizes the full text, and points out the shortages existed in the research and furtherresearch directions.