Research On The Correlation Between Internal Control And Enterprise Performance

The separation of two rights which exists in the modern enterprise makes the information asymmetry between managers and owners generally exist.This means companies with better supervise and incentive usually enjoy a higher level of enterprise performance.As everyone knows,internal control,as one of the most important parts of enterprise management,can guarantee the efficiency and effectiveness of enterprise operation,and then promote the performance of enterprise.Besides internal control,product market competition is very effective in preventing managers from slacking off and solving principal-agent problems.In this paper,data of China’s 2012-2015 non-financial listed companies are selected as samples,the rate of return on total assets and net assets yield as substitute variables of corporate performance.Use the score listed company’s internal control index to measure the internal control of the enterprise.Use Fanta’s index(HHI)to measure the enterprise faces the product market competition.Firstly observed the effect of action from outside the enterprise product market competition for enterprise performance and from the enterprise internal control of the enterprise performance,and then based on the study of product market competition as a variable in the internal control and corporate performance of the relationship between the role of.The empirical results show that:(1)product market competition pressure from outside the business,can improve enterprise’s performance,and the effect is more obviours in non-state-owned enterprises than in state owned enterprises.(2)the internal control for any type of enterprises,namely both state-owned enterprises and non state-owned enterprises,has increased their performance obviously,further consideration of this exaltation efforts,in the role of state-owned enterprises is slightly stronger than that of non state owned enterprises.(3)product market competition as a moderating variable,weakened the effect,the enterprise external product market competition,will weaken the enterprise internal control’s effect of improving enterprise performance in a certain extent.And the intensity is stronger in non state-owned enterprises.On the basis of the above research conclusions,this paper puts forward some policy suggestions,and tries to provide experience for all walks of life to continuously improve their performance.Specific proposals are made from the following aspects:building a favorable market competition environment,strengthening internal control,taking overall consideration of market competition and internal control,enhancingother aspects of enterprise management.