Quality Of Internal Control Factors And Economic Consequences

Internal control is an efficient guarantee to corporate governance. An effective internal control could correct employers’mistakes and prevent their cheating in a company. As a result, the company could develop smoothly as well as sustainably. In recent years, internal control becomes a heated topic theoretically and practically.In this essay, firstly we will review the literatures on impacts of internal control and review the internal control systems evolution. Then, based on figures of the Shandong Xinhua Pharmaceutical Company Limited ranged from the year of2009to2012, we will study the features of listed companies in different ways, such as descriptive statistics, Correlation analysis, multiple regression analysis and etc. We try to investigate two problems in this essay. First, empirically analyze the impacts of internal control from three points:property right, board features and executive compensation incentive. Second, study the economic result of internal control from market response and earnings quality. The findings may provide theory basis and feasible measure for increasing internal control quality and perfect management system.