Internal Control, Connected Transaction And Investor Protection

Typical means of a very large shareholder expropriation listed company resources, and theninvaded and occupied the interests of small shareholders is not standardized related partytransactions. View of the interests of investors may have been infringed, so a series of institutionalarrangements are needed to protect investors get a reasonable return, and to protect the interests ofinvestors from encroachment, this series of institutional arrangements that the internal controlsystem. Conduction effect of the main line of the internal control and protection of the interests ofinvestors as a starting point to Protection of small investors, internal control is demonstrated howto affect the interests of small investors, and thus test related party transactions start to study theinternal control, related party transactions and investor protection among internal relations.This article in the Treasury Department, the Securities and Futures Commission, the AuditCommission, the China Banking Regulatory Commission, China Insurance RegulatoryCommission in May2008, five jointly promulgated the enterprise internal control basic norms,jointly promulgated in2010,"Enterprise Internal Control Guidelines issued by the Ministry ofFinance in early2006"new Accounting Standards" system context, the disclosure of the data in2087listed companies from2008to2011for the study sample, using the method of combiningnormative analysis and empirical research on the basis of theoretical analysis of the domestic andforeign,the proposed research hypothesis and build a model of the mediating variables throughthe introduction of related party transactions, internal control, the relationship among the relatedparty transactions and investor protection, which provides empirical evidence for small andmedium investor protection.Related party transactions as the core,"Technology Co., Ltd. of Shenzhen the Diboenterprise risk management, internal control of listed companies in China White Paper of theinternal control index to measure the level of internal control, by to build investor protectionindicators, try to study the related party transactions of internalconduction effect control andinvestor protection. The study results show that:1) the level of internal control have significantimpact on the protection of the interests of investors, the internal control to build the moreperfect, more conducive to the protection of the interests of investors.2) the level of internalcontrol have a significant impact on related party transactions, improve the construction ofinternal control can suppress the output related party transactions occurred.3) Related partytransactions a significant conduction effect on internal control and investor protection, improveinternal control can suppress the output related party transactions occurred, to regulate input typeassociated with the occurrence of the transaction, the purpose of protecting the interests ofinvestors.Finally, summarize the results of empirical research and policy recommendations, alsopointed out the limitations of this study and inadequacies.