Influence Of Deficiencies Of Internal Control On Financial Performance

On the basis of the external and internal environment,to create economic value and ultimately realize the social value is the main objective of company.The operating performance of listed companies is the common focus of government regulators,customers and suppliers, employees and many other stakeholders.Scientific and rational internal control is the basic premise and the fundamental guarantee of achieving business objectives.The scandals of business failure and financial fraud,taking Enron case and event of China Aviation Oil for example,revealed the existence of problems and shortcomings in internal control.The effect of deficiencies of internal control on financial performance should not be overlooked and it is a question worth exploring.The research takes textile listed companies as an example and collects relevant data and information of five consecutive years.Based on industry characteristics and development status,it selects 18 financial indicators of six dimensions,builds evaluation system and calculates the composite score of financial performance.On the basis of the disclosure of internal control deficiencies,it identifies internal control deficiencies by signs and tests the effect of deficiencies of internal control on financial performance by regression analysis and robustness test.The research strives to innovate from the followings.On the basis of the disclosure of internal control deficiencies,it includes signs of defects into the identification factor.Based on industry characteristics and development status,it selects 18 financial indicators from six dimensions,takes textile listed companies as an example and collects relevant data and information of five consecutive years.