Internal Control, Audit Quality And Financing Constraints Of Listed Companies

Currently, along with the rapid development of the Internet of things and diversified services, the industry is bringing in the new industrial revolution, countries all over the world are using technologies such as digital and intelligent on the transformation and upgrading of the on traditional manufacturing mode of production. This is a significant opportunity of China’s economy, but also a test of China’s development of past 40 years. As we all find, the slowdown of China’s economy growth promote the transformation and upgrading of China’s economy, the core aspect of the process is the release of Chinese enterprises’ innovation, which may bring a new way of economic growth. Economic of China is now walking down from the peak of China’s demographic dividend, it is an urgent project to figure out how to increase economic productivity and efficiency of resource allocation element. The driven elements of economic growth is transferring from factor inputs to knowledge-driven innovation, in which social resources, especially supports of the transfer of capital element is particularly critical, only when the capital market is effective in allocation of resources, the ability of innovation and economic effects of listed companies can be fully inspired.However, in China, the problem of financing constraints is a common problem during the upgrading and restructuring process, financing always determines the survival and development prospects of the company. As an important aspect of enterprise management, the governance of listed companies can influence company’s financing constraints, the internal control and the external independent audit, as two main aspects of corporate governance, have a great influence impact on the financing process of listed companies.This thesis selects the A-share listed companies of Shanghai and Shenzhen market from 2012-2014 as samples, raise three hypothesis on the basis of theoretical analysis and select relevant variables, then check the relationship among internal control, external independent audit and financing constrains with multiple regression analyses. At last, combined with the position of internal control, external independent audit and financing constrains of samples companies, this thesis puts forward some corresponding recommendations to alleviate the degree of financing constraints.The empirical results shows that, among the sample companies in this thesis, the improvement of internal control quality and the increase of the quality of external independent audit of listed companies have a relief effect on financing constrains. Further study shows that, in the companies who have a lower quality of internal control, the increase of the quality of external independent audit has a more obvious effect on releasing financing constrains; As well, in the companies who have a lower quality of external independent audit, the increase of the quality of internal control has a more obvious effect on releasing financing constrains. Thus, the results shows that internal control and external independent audit can be substituted to each other on the relief of companies’ financing constrains.