A Study On The Impact Of Board Characteristics On The Quality Of Internal Control

With the rapid development of market economy and the continuous improvement of modern enterprise system,a series of financial fraud cases occurred continually in big company domestic and abroad,such as Olympus accounting malpractice,Wanfu Health Index fraud,Everbright Securities Oolong Event,The bank of China wool industry share reform performance fake standards,Sofute financial chaos,etc.,internal control has been debated a lot.Internal control system is continually developing and improving.Meanwhile,it gradually become an important measure for enterprises to strengthen management of risks.As the core commercial decision-making body and the head of internal control,the boards affect the efficiency of enterprise management and supervision,meanwhile they determine strategic direction of enterprises.Based on this background,characteristics of the board are included in the research of internal control,and its impacts on the enterprises in different ways.In this paper,the theoretical and empirical study are combined.Firstly,the paper reviews the relative empirical literatures domestic and abroad,defines the relevant concepts,and explains the basic theory.Secondly,different characteristics of the board of listed companies in the five northwest provinces are analyzed.In order to evaluate the quality of internal control,methods that combine the factor analysis and catastrophe progression are conducted.Then,comparisons between internal control level of five provinces in northwest are provided.In addition,based on the conclusive theories,research hypotheses are examined by the correlation analysis and the curve and linear regression method,taking of the listed companies in the five northwest provinces as the samples.The results of the study show that the establishment of the two posts,the number of board meetings,the stability of the board and the financial background of the board,affect the quality of internal control.Finally,the paper puts forward suggestions on improving the quality of internal control of listed companies from the different characteristics of the board.