Empirical Research On Internal Audit Mechanism And Investor Sentiment Of The Real Estate Listed Companies In China

Since the reform and opening took place in China, along with the rapid development of our country market economy, the increasingly consolidation of economic system, the economic environment has undergone complex changes,which inevitably poses many problems for the management of public companies. Among them, the real estate as a pillar industry of national economy, its development level marks our country’s economic development level, social development level and the national comprehensive strength. At present, under the circumstance of the separating ownership from management authority, the agency problem is increasingly serious, and paid more and more attention. To seek steady development in the complex economic environment, and effectively avoid the impact of the agency problem on the company,the real estate listed companies need to perfect internal auditing mechanism on the basis of establishing internal audit system, thereby improve corporate performance, and increase the value of the company, attract external investment from outside investors, and stimulate the investor sentiment.In1985, the national audit office required large and medium-sized state-owned units set up internal audit institutions; In2002, China’s securities regulator proposed establishing internal audit system for public companies; In may,2003, the implementation of "regulations about internal audit work of audit" clearly points out that the state organs, financial institutions, enterprises and public institutions, social organizations, and other units, should be in accordance with the relevant provisions of the state to set up a sound system of internal audit. Visibly, establishing a scientific and effective internal audit system, has become an important measure for the management to improve corporate management, the investors to make investment decision, the creditors to lend and the government exercise macro-control.There have been a lot of research results about internal audit system at home and abroad, including internal audit system established motivation, running mode and benefit evaluation. However, these studies mostly from within a company, around the internal audit system to improve corporate governance, increase the value of the company, are short of a perspective from outside to study the effect of establishing and effective running of internal audit system on investors, namely whether investors prefer the kind of companies which establish and effective operate internal audit system.This paper, on the basis of using domestic and foreign scholars’research achievements for reference, abandoning the consistent perspective of corporate governance, starting from the mechanism of internal audit system, and making the real estate industry listed company as the breakthrough point, studies influence of the establishment and effective operation of the internal audit system on investment preferences and investment decision-making of the outside investors. The ultimate goal of research is:on the one hand, empirically testing the influence of establishment and effective operation of internal audit system in China on investor sentiment; On the other hand, to provide relevant Suggestions about whether the company establish internal audit system and the operation is effective in practice. These are research motivation and innovation points of this article.This paper includes the following six parts:The first part, introduction. Mainly elaborate research background, research ideas, the structure of the framework and research methods, as well as innovation points in this paper.The second part, the literature review both at home and abroad of the internal audit system and investor sentiment. Through the internal audit system and investor sentiment research results at home and abroad, the representative empirical research results of the internal audit system and investor sentiment were compared and analyzed.The third part, the theoretical analysis of internal audit system and investor sentiment. First of all, expounds the connotation of the internal audit system, which defines the concept of the internal audit system, and introduces the investor sentiment theory and measurement indicator, and second, on the basis of relevant theories, put forward the hypothesis of this paper,.The fourth part, the research design. In this article, through analysis and study of internal audit system and investor sentiment theory, determine the proxy variables, construct an empirical model. Using real estate listed companies as samples, collect index data of the establishment and operation of internal audit system, and Stock Trading Volume, then, build an empirical model.The fifth part, the empirical results and analysis. In this section, I will firstly give the general characteristic of samples descriptive statistical analysis, secondly analyze the regression results of the empirical model, and verify the hypothesis in this paper.The sixth part, research conclusion and policy recommendations. According to the empirical results, I will infer some research conclusions and give the relevant policy recommendations about the various indicators and the problems reflecting in this paper, finally, point out the deficiency in this paper and the outlook for further study.