Researchon The Company Internal Control Under The Differentiation Of External Governance

Internal control is associated with the development and bottom of social economy, it penetrates each link of the management and operation activities in company, and it not only is a very complex and complicated system engineering, but also is an important content focused by modern company. As the important weapon in the modern company management, and the benefit method of promoting the long term development, internal control has played an important role in establishing and improving self-restraint mechanism, and improving the economic benefit. In the period of "emerging and transition" in China, the development of external governance is not perfect, and the internal control behavior of listed companies also have some shortcomings and the insufficiency, which have already harmed the interests of investors and creditors and other stakeholders seriously, and also affected the efficient allocation of capital. Moreover, internal control problem has been more concerned in the field of company management field, and how to promote and improve the efficiency of the company’s internal control according to the difference of the external governance environment has become an urgent need to solve the problem.At present, China’s regional external governance environment in the period of economic transition have been different overall, and the imperfect external governance environment can provide breeding grounds for the failure of internal control and the difference with "greenhouse and soil". At present, the literature somehow come from LLSV "law and finance" perspective, and analyst the horizontal transnational comparative among many countries, but they seldom involve time series analysis in a single state of; and for the analysis of the effectiveness of internal control in company, it is only from the quality of financial reporting, earnings management and governance of listed company, and the direct study between internal control and external governance environment is rare deeply. In view of that, basing on the perspective of external governance environment, combined with the special background of economic transition and regional economic development of our country, aiming at the shortcomings in the existing research, basing on the data from2011to2013as research sample, the paper focuses on the following three questions:(1) the measurement of the external governance environment in China;(2) the analysis of social responsibility basing on the perspective of internal control;(3) from the external governance environment, we study the difference of the internal control. About the structure of the paper, first the paper relates theories of external governance environment and the internal control theory, and summarizes relevant theoretical foundation; second, the paper constructs the external governance environment evaluation system, and the measurement of social responsibility of company internal control; third, the paper tests the relationship between the external governance environment and the social responsibility of the company internal control, and compares the different degree among internal control under different external governance environment; finally, the paper puts forward to the opinions about promoting internal control of listed companies in our country, to improve the level of internal control theory research in China, and to practice management ability, and to improve our country enterprise internal control present situation, and to ensure the quality of accounting information reasonably, and to improve corporate governance and information disclosure system, and to protect the legitimate rights and interests of investors, and to ensure the efficient operation of capital markets.Research contents of the paper focuses on, under such a big background in our country about the unbalance of regional development, basing on corporate social responsibility guidelines, the analysis between the external governance environment and the company internal control. The paper mainly adopts normative research and empirical research methods, using the50companies score and related data in "100China corporate social responsibility ranking in China enterprise", to test how the external governance environment affects the internal control of the company basing on the social responsibility.The research results in this paper show that:(1) from the point of view of economic geography, external governance environment in our country exists obvious regional differences, the eastern coastal area is the most economically developed area in our country, and its external governance environment is also good. In the degree of marketization, the legal system level and the degree of government intervention, the eastern region has the highest score, and the lowest score is in the west. But in terms of legal system level, the central region has lead the northeast region. In terms of degree of government intervention, the central region is slightly inferior to the northeast region;(2) because of the influence of external governance environmentdifference, the company’s internal control efficiency in China also has certain provinces differences, meaning that the higher degree of the government intervention is, the more efficiency the company’s internal control is; the higher degree of marketization may affect the company’s internal control efficiency; and the legal system level doesn’t influence the efficiency of internal control more or less;(3)because of the influence of external governance environment difference, there are also some regional differences in the company’s internal control efficiency in China, meaning that the higher degree of marketization is, the better the legal system level is and the higher degree of government intervention is, the more perfect and efficiency the company’s internal control is. And that, company internal control efficiency in the eastern area is significantly higher than the company internal control efficiency in the central and northeast area, however, company internal control efficiency in central and northeast areas are similar more or less.Finally, the paper argues that to ensure the good internal control efficiency, is not only from the perspective of operation and management behavior in internal and external of company, but also from the improving the company’s external governance environment actively, to achieve efficient and perfect system of external governance environment.