Research On The Effects Of Internal Control Deficiencies And Its Improvement Over Cost-stickiness

Since the implementation of the internal control standard system, it has produced a huge driving effect in the enterprise. This shows that most listed Corporation have established sound internal control system in accordance with the requirements, and can regularly disclose internal control information. After a series of regulatory requirements and special activities, the internal control of the listed Corporation has made fruitful improvement.The continuous improvement of internal control is an important guarantee for enterprises to guard against and avoid operational risks. The defects of internal control will have a serious impact on the development of enterprises, and even lead to the closure of enterprises. The research on internal control defects is mainly from the perspective of accounting information, capital cost, study about internal control defects from the perspective of cost expenditure, especially from the perspective of cost stickiness is not common. There’s no clear answer on whether the defects of internal control will affect the enterprise’s cost stickiness, and whether the impact will disappear after rectification. So this paper attempts to make a preliminary inquiry into the problem.First of all, this paper reviews the relevant literatures about internal control defects, and puts forward the research hypothesis on the basis of relevant theories. And then research the influence of internal control defects and its rectification on the Cost Stickiness of listed Corporation. Study found that compared with the internal control without defects, when the enterprise has internal control defects, the Cost Stickiness will increase significantly, and after rectification, the Cost Stickiness will be significantly suppressed. At last, the paper puts forward the corresponding suggestions, and puts forward the limitations of this paper and the prospects for the future.