An Research On The Correlation Of Internal Control And Corporate Governance

Reviewing the domestic and international major financial frauds or irregularities,no matter the Enron event and Toshiba fraud happened at abroad,or CAO affairs and Zhangzi Island event happened at home,they are all related with the poor internal control quality.Many countries are taking various measures to improve the quality of internal control for solving the problem.In 2002,to achieve the purpose of protecting stakeholders,the United States passed the Sarbanes-Oxley Act(SOX Act)which may improve the accuracy and reliability of disclosing information.Some relevant departments in China released the Enterprise internal control basic norms and the internal control guidelines,so that can promote the company's internal control construction,improve the quality of internal control of listed companies.Releasing of all kinds of relevant laws and regulations at home and abroad,provides the theoretical and legal support.But because market economy development in China started relatively late,and the study of internal control has short time,there is still unsound internal control system and the internal control with poor quality,even has learned a lot of advanced internal control theory.Listed companies in our country at present stage has some issues in the internal control and corporate governance,mainly in the following several aspects:Governance structure is imperfect,the internal control effect is poorer,financial fraud and irregularities happen occasionally;Company operator's self-interest behavior will lead to the company's resources for the own interests,and due to information asymmetry,business owners and other stakeholders can not constraint operator's behavior effectively because do not understand the operator's self-interest behavior.In this paper,we study the correlation of the quality of internal control and corporate governance by using the empirical method to provide the basis for improving the quality of internal control and helping company to carry out the better construction of internal control which can improve the efficiency of company management,protect the company property security.In this paper,we use the data of 2013-2015 Shanghai Stock Market's listed company as the research objects.The paper adopts normative research and empirical study,on the basis of summarizing the literature expounded theory to build model,and uses the empirical method to study the correlation of the quality of internal control and corporate governance.The result of research shows that corporate governance factors will affect the quality of internal control,especially ownership concentration,the number of shareholders' general meeting,numbers of the meeting of the board and the number of independent directors to attend the meeting.The research conclusion can provide the reference for our better understanding of corporate governance on the quality of the internal control,which will optimize the governance structure,improve operating efficiency and protect the company's internal control.