Research On The Relationship Between Internal Control Defects And Enterprise Financial Performance

Nowaday,financial frauds of listed companies emerge one after another at home and abroad.The importance of internal control has gradually attracted the attention of regulators and scholars.As a result,China issued a series of documents from 2008 to 2010.The self evaluation report on internal control and the classification of internal control defects are clearly stipulated.By 2014,the establishment of internal control system in China is basically perfect.In China,studying the influence of the internal control defects on the financial performance from the listed companies,we can understand the economic consequences caused by the internal control defects,enhance the managers' attention to the internal control,and improve the initiative and initiative of the listed companies to promulgate and implement the relevant rules and regulations of internal control.The internal control system has been gradually improved at the national and enterprise,reducing the shortcomings and loopholes of internal control,and improving the financial performance of enterprises.This paper studies the relationship between internal control defects and financial performance of A-Share Listed Companies in 2014-2016 years.It mainly adopts the method of combining theoretical analysis,entropy model and empirical research.On the basis of the definition ofrelevant concepts and the related literature at home and abroad,we choose the theory of principal and agent,information asymmetry theory and signal transmission theory as the theoretical analysis of the relationship between the two,and then put forward the research hypothesis of this paper.Then,whether there exists the internal control defects and whether there are different strictness in the existence of the Sample Firms The internal control defects of the heavy degree are the independent variables in the hypothesis H1 and the hypothesis H2,and on the basis of combing the domestic and foreign literature,the control variables that have influence on the financial performance and the internal control defects are selected,and the related models are constructed.13 financial indexes are selected in 5 dimensions of long capacity and cash flow,the comprehensive evaluation index system of enterprise financial performance is constructed,and the entropy model measurement is used to measure objectively.This is one of the innovation points of this article.From the two aspects of direct evidence and indirect evidence,it is more comprehensive to know whether the internal control defects exist in the enterprises.The direct evidence is obtained from the audit conclusions of the internal control self evaluation report and the internal control authentication report.The indirect evidence is obtained from the above negative statements about corporate governance or internal control;the internal control defects and the internal controldefects of different severity,and the internal control defects and the enterprises are tested by the empirical analysis and empirical test.The relationship between the financial performance of the industry.The results show that the internal control defects can significantly reduce the financial performance of the enterprise;the major defects in the internal control defects of different severity have the greatest impact on the enterprise financial performance,the important defects and the minimum of the general defects.