Empirical Study On The Effect Of Corporate Governance To Audit Fees Of Internal Control

Audit of internal control refers to the special procedures of the implementation of the enterprise internal control from certified public accountant:They audit the effectiveness of internal control for a specific date and publish audit opinion. From the beginning of this century, a series of astonishing financial fraud cases severe vibration in capital markets. At the same time, it caused intense attention to the accounting profession, government regulators, non-governmental organizations and social public people. The reflection of the series of events is deeply from different angle. Creation of "Sarbanes-Oxley" expanded the requirements of audit committee, the external auditors and management governance which put forward the demand directly to expand the internal control audit function and caused the attention of the internal audit in corporate governance role. Audit of internal control in our country developed on basis of the condition of our country and combining with the draw lessons from foreign advanced. Since July 1 2009, our country implement "The Basic Norms of Enterprise Internal Control " within the scope of the listed companies, it known as "The Chinese Version of Sarbanes-Oxley" require the listed companies which perform this specification to hire social audit institutions to audit the internal control effectively. These companies must be disclosure internal of control information instead of voluntary disclosed, this makes the corporate governance level of internal control audit of internal control effectiveness audit puts forward a new urgency demand, it is also injected new vitality to the internal control auditing which as the starting point and end-result with corporate governance. Sarbanes-Oxley strengthened the responsibility of the internal control of listed companies from a certain extent, but also had a lot of controversy because of its high implementation costs and produce. Especially, the huge rise of audit fees caused a heavy burden to the listed companies. Although scholars generally believed that the increase of audit fees is caused to the requirement of internal control audit. However, the study of specific factors influencing to the audit fees of internal control is very little, the study of the affecting factors about audit fees also failed to distinguish between audit and audit fees of internal control after the Sarbanes period. This paper based on this theoretical background, research the influence to the cost of the audit of internal control from the perspective of corporate governance influence.On the basis of the study of domestic and foreign related literature, this paper introduces the theory of audit fees, audit fees of internal control and corporate governance. This paper analyzes the correlation of corporate governance and audit fees of internal control, providing theoretical basis for the empirical part of the hypothesis. In the empirical analysis part, audit fees of internal control was explained variable, with the first big shareholder’s stake, chairman and general manager the joining together of two position and number of the board of directors, the proportion of independent directors, management shareholding was explanatory variables, assets, asset-liability ratio and liquidity ratio indicators as control variables. The influence factors of the audit fees of internal control was analyses with the multiple regression model in corporate governance perspective. Empirical study results showed the first big shareholder shareholding, the proportion of independent directors, management equity percentage impact on audit fees of internal control. Finally, this paper put forward the policy suggestions to strengthen the enterprise internal control in corporate governance perspective.