Empirical Research On The Influence Of The Ownership Structure To The Internal Control Effectiveness

GEM (Growth Enterprise Market) board has established in the Shenzhen stock exchange since2009. Up to now, there are total355companies listed on GEM, which has started to become the focus of many stockholders. However, the achievements of the companies short-term turn hostile when they come into GEM board. Besides, executives’ selling behaviors and financial fraud all reveal the internal control defect on GEM board. Building internal control is a systematic engineering. Corporate governance is the foundation of internal control institution, and ownership structure is the key of corporate governance. Therefore, the paper will in-depth study the ownership structure of GEM listed companies on the internal control effectiveness. Moreover, based on overseas and domestic research, there was less research on the relationship between ownership structure and internal control effectiveness of GEM listed companies, compared with main board and SME board listed companies.The paper combines theory with empirical analysis. First of all, the paper defines ownership structure and internal control. Secondly, from the perspective of the theory analysis, the paper introduces principal-agent theory as theoretical basis of the research firstly. Then author explains how to evaluate the effectiveness of the internal control. At the same time, author has reviewed overseas and domestic research as the starting point of this paper. Thirdly, from the perspective of the empirical analysis, author collects relevant data and design relevant variable. Using factor analysis, author gets the integrated evaluation index of internal control effectiveness. And then multiple regression models was build, which accommodate nine explanatory variables.In order to deeply analysis how listed companies’ ownership structure influences internal control effectiveness. We put forward that ownership structure affects effectiveness of internal control from ownership concentration, ownership balance, ownership property, shareholding ratio in AGM. Last but not least, author come up with some suggestions(ownership concentration moderation, introduction and motivation of professional managers, attraction and cultivation of institutional investors, network voting comprehensive) to optimize the ownership structure of GEM listed company and improve the effectiveness of internal control.