Research On Correlation Between Corporate Value And Effectiveness Of Internal Control Of Listed Companies

With the development of the theory of internal control and the "Norms of Internal Control" and "Internal Control Guidelines" issued, we has formed a mature system of internal control theory. Nevertheless, most enterprises were mostly for policy enforcement to establish an internal control system, lack of motivations and demands coming from inside. With increasingly complex external environment accompanying a variety of uncontrollable internal or external risk factors, enterprises are supposed to focus on the effectiveness of internal control systems to enhance corporate value. In this context, depth discussion of the effectiveness of internal control relevant to the enterprise value has important theoretical and practical implication. It can draw managers’attention and promote enterprises to improve their internal control system.This paper defined the establishment and implementation of the internal control that can provide reasonable assurance for the realization of control as the effectiveness of internal control. According to the description of the goals of the internal control in Norms of Internal Control, the overall objective of internal control is divided into five parts-strategic objectives, operational objectives, reporting objectives, asset security objectives and compliance objectives, which is the basis of building a quantifiable evaluation model of the effectiveness of internal control systems. AHP and principal component analysis method are combined to form the model in order to comprehensively assess the effectiveness of the internal control of listed companies.First of all, this paper theoretically discussed the impact of the extent of achieving internal control objectives and analyzed the relationship between internal control and enterprise value from perspectives of principal-agent theory of internal control, risk management theory and value management theory. To further analyze the role of the effectiveness of internal control in enterprise value, Shenzhen-listed manufacture companies in2010and2012are selected as research samples to conduct empirical analysis of the relationship between the values of the enterprise internal control through using the overall effective internal control Index and sub-index resulted from the evaluation of the effectiveness of the internal control system as the substitute variables. The results show that there is a significant positive correlation between the effectiveness of internal control and enterprise value.