Empirical Research On Internal Control Effectiveness Impact On Company Performance For Evidence

Studies of internal control defects, empirical exploration is mainly the factorsinfluencing the disclosure of internal control defects and economic consequences,normative research mainly focused on the internal control framework, standards andthe study of internal control information disclosure quality.In empirical aspect, mostof them are related to information disclosure of internal control defects, there are alsosome scholars from the perspective of sign identification for identifying whether thecompany internal control defects.Again because I through statistical shenzhen smalland medium-sized boards of listed companies, internal control audit report found thathad not been issued by the company’s internal control of non-standard audit opinions,these statistical data would be no practical research value.So, this article also from theperspective of sign identification to identifying whether the company internal controldefects, and on the basis of the recognition, to identify the defects of internal controleffect on corporate performance.Based on the2012Shenzhen Stock Exchange, small and medium enterprises assamples, the small and medium-sized plate from the mainboard has its particularity,this study also found that, in the aspect of control variables, the relationship betweenthe scale of the board of directors and corporate performance in contrast to thepredecessor to the mainboard as the research object of the results.Such as, ZhangLixian (2012) study found that board size is negatively related to the corporateperformance, and the results of this article is positively related to the scale of theboard of directors and corporate performance.In this paper, in view of the internalcontrol defects information identification, to examine the effectiveness of internalcontrol, and then study the economic consequences of internal control defects.Thedisclosure of internal control defects whether voluntary or mandatory, is by themanagement evaluation, there is a lot of subjectivity.So this article USES the financialreport restatement, non-standard audit opinion, litigation, etc. The fact that hasalready happened, respectively as substitution variables of the internal control defects,the empirical investigation of the listed company internal control defects relevant relationship with corporate performance.The study found that control the otherinfluencing factors, enterprise internal control defects and present a negativecorrelation between corporate profitability, namely negative correlation withcorporate performance.Therefore, can be thought of as internal control quality andprofitability are related (i.e., the high and low positive correlation with corporateperformance), the strengthening of internal control helps to improve the operatingenvironment, improve the management efficiency and effect, improve profitability,shows that internal control quality is positively correlated with corporate performance,which consistent with the hypothesis of this article is.The conclusion of this article: the effective internal control helps to improve thecompany’s operating environment, help the company efficient operation, improveoperation efficiency and effect, namely the high quality of internal control qualityplay an important role in improving corporate performance.Therefore, in order to beable to effectively reduce the risks, improve company performance, the listedcompany should be based on the characteristics of the company at this stage, such ascompany size, financial, management characteristics, and combined with thecompany’s strategic plan, establish a consistent with their own internal control system.