Research Of The Impact On Financial Risk Of Internal Control On Chinese Coal Companies

With the development of economic globalization, the market economic environment has become increasingly complex, exacerbated financial risk of the enterprise.In recent years, many financial crisis at home and abroad in case the surface was caused by the company failed to respond effectively to changes in the environment, but virtually all of internal control failure were closely linked. Coal is the most abundant fossil fuel on the earth, while China ranked in the world's coal resources, coal companies occupy an important position in Chinese national economy. Since the "Twelfth Five-Year" plan,Chinese coal enterprise strengthened the integration of resources, mergers and acquisitions,so that increased competition among coal enterprises, increased financing needs, which was likely to result in failure of internal control, and the enterprises fall into financial crisis.Because coal listed companies have more transparent information, this article study the impact on financial risk of internal control of Chinese coal listed companies.This paper firstly summarizes the relevant literature of internal control, financial risk and the impact on financial risk of internal control at home and abroad; secondly,introduces the theory of internal control and financial risk, explains the impact on internal control mechanism of financial risk, and analyzes the status of internal control and financial risk in Chinese coal companies; thirdly, selects 35 Chinese coal companies listed in Shanghai and Shenzhen during 2009-2013 for the study, uses multiple linear regression model, from the eight aspects of ERM risk management framework for internal control evaluation,verifies that the elements of the more effective internal controls, the lower financial risk of the research hypothesis; finally, draws conclusions, suggestions and prospects.The research shows that the more effective the Chinese coal listed companies' internal control, the lower financial risk. This research plays a positive role that help coal companies developing internal control system for their own development, establishing and improving risk warning system, controlling of financial risk and promoting sustainable development.