The Impact Of Internal Control On Corporate Financing Constraints

Since the financial crisis in 2008,in order to cope with the complexity of the economic environment,China’s central bank continued to use the benchmark deposit and lending rates,rediscount rate,deposit reserve ratio and other tools to adjust monetary policy.The frequent changes of monetary policy provide a rare opportunity for the study of macroeconomic policy changes and micro enterprise financial management.With the tightening of monetary policy,the problem of financing constraints has become an important problem for enterprises to avoid.However,listed companies frequently heard of financial scandals,major business mistakes or It is often seen.bank loans and investment,it is difficult to recover the situation also continue to occur,leading investors suffered huge losses,which greatly affect investor confidence in the market for.Internal control,as an important control mechanism,has a natural advantage in the protection of investors.Internal control quality represents the company to ensure the reliability of financial information and operating efficiency,so the quality of internal control affect the financing constraints faced by enterprises,internal control deficiencies will make enterprises face higher financing constraints,and the interactive effects of internal control quality and monetary policy on corporate financing constraints is the main problem of this study.Based on reviewing many literatures at home and abroad,this paper 2009-2015 Shanghai and Shenzhen A shares of listed companies as the research object,using Chinese tiandihengyi,the listed company’s internal control index as a measure of the quality of internal control to carry on an empirical research.The study found that:(1)the quality of the internal control can significantly reduce the financing constraints of listed companies;(2)internal control deficiencies of listed companies face higher financing constraints;(3)the defect of internal control,defect rectification rectification will face financing constraints with respect to the smaller;(4)the internal control of the general defects and serious defects have exacerbated the effect of financing constraints,and the effect of serious defects more significant;(5)the tightening of monetary policy,enterprises are facing financing constraints stronger;(6)the quality of the internal control helps to weaken the tight monetary policy led to financing constraints.Finally,based on the above conclusions,this paper puts forward the corresponding policy recommendations from the regulatory and corporate level,analyzes the limitations of this paper and prospects the future research direction.