Study On The Correlation Of Internal Control And Corporate Profitability Of The Listed Companies

At present,the academic research on internal control and profitability is quite rich,but the literature on the relationship between internal control and profitability is relatively rare.The relationship between internal control and profitability should be traced back to a series of internal control standards promulgated by the government.The government's internal control norms are not only expected to improve the level of business management and risk prevention,but also hope that through the mandatory system to ensure that the enterprise Financial report of the real and reliable,regulate the operation of the market.It can be seen that good internal control should improve the profitability of enterprises,but in order to ensure the reliability of financial reports,enterprises have to pay the corresponding internal control consulting and audit behavior of the system cost,in order to explore the relationship between the two,This paper analyzes the relationship between the internal control situation and profitability of listed companies in China under the modern enterprise system,draws and analyzes the research conclusions and puts forward suggestions for improvement.This paper first combs the research literature of internal control and profitability both at home and abroad,summarizes the theoretical basis of the development of the two,quantifies the internal control and profitability indexes of the enterprise.The internal control indicators using Dibo internal control data and profitability combined with the current business structure and comprehensive evaluation system of the operating conditions,identify financial indicators that represent the profitability of an enterprise,the use of principal component analysis method to calculate the comprehensive profitability of enterprises.According to the theoretical analysis,we construct the regression model,collect the panel data of the sample company in 2015,and make an empirical analysis.Finally,we conclude that the internal control of the company has a positive correlation with profitability.This paper argues that the establishment of effective internal control of listed companies can have a positive effect on their profitability and improve the profitability of enterprises.On the contrary,ineffective or inexplicable internal control can hinder its profitability.According to the research results,the listed companies should strengthen the construction of the internal control system and increase the implementation of the internal control system.The improvement of internal control construction involves all aspects of human,financial and material,all-round consideration can reduce or even eliminate the possibility of failure of internal control,and promote the sustained and stable profitability of listed companies to ensure long-term business continuity.