Research On The Impact Of Internal Control Defects On Corporate Performance

In the 1990 s,the frequent occurrence of accounting scandals implied the weakness of internal control supervision.It was a hidden danger for the company's operations.Severe circumstances may lead to the demise of a company.Therefore,how to strengthen internal control needs to be resolved.Since then,the issue of internal control has become a hot topic in the theoretical and practical circles.Relevant departments have successively introduced macroeconomic policies to regulate the construction of internal controls.With the promotion of policies,domestic and foreign scholars have begun to explore the various effects of internal control problems in enterprises.Previous scholars' research mainly involved the factors affecting the quality of internal control,internal control deficiencies and their influencing factors,the relationship between internal control deficiencies and capital costs,and earnings management.In 2012,China began to require companies to disclose the current state of internal control.After several years of development,more and more companies have actively disclosed the current state of internal control,and their forms have become more standardized,providing opportunities for scholars to study corporate issues from the perspective of internal control.Up to now,most domestic and foreign scholars have studied the relationship between internal control flaws and corporate performance from the perspective of the existence or absence of internal control flaws,and some scholars have subdivided the internal control flaws according to the degree of influence,To study whether different levels of internal control flaws have the same impact on company performance.Based on the initial sample of listed A-share listed companies in Shanghai and Shenzhen stock exchanges in 2014-2016,this paper studies the relationship between internal control deficiencies,subdivided accounting and company-level internal control deficiencies and corporate performance,The nature of property rights,internal control flaws and the two levels of internal control defects after segmentation and the relationship between corporate performance and the nature of the two properties under the same impact of the company.This article draws lessons from the previous classification basis and method,divides the internal control defects into the accounting level and the company level,and gives the specific classification criteria of the two.Based on the theoretical basis of principal-agent,information asymmetry and signal transmission theory,this paper analyzes the impact of internal control defects and subdivided internal control defects in this paper on current company performance,and identifies the differences in company performance and internal control quality under different property rights.Further analyze the impact of internal control defects and subdivided internal control flaws on company performance under different property rights nature,introduce the assumptions on this basis,build a model based on this,and test the impact of internal control defects and subdivided internal control defects on current company performance.And the impact of grouping on state-owned and non-state-owned enterprises.The research results show that,overall,the existence of internal control defects will significantly reduce the company's performance;the subdivided accounting levels and corporate-level internal control deficiencies are negatively related to corporate performance,and corporate-level internal control deficiencies negatively affect corporate performance.The impact is greater;under the nature of different property rights,internal control defects and internal control defects at both levels after subdivision are negatively related to corporate performance,and have greater impact on non-state-owned enterprises.This article mainly deals with literature analysis,qualitative analysis and empirical analysis.Through the study of a large number of documents,to understand the research status of internal control defects and corporate performance,to form a scientific understanding of defects in internal control and internal control defects at different levels,and on this basis put forward the issues to be studied in this paper.By analyzing related theories,the impact of internal control defects on current company performance is clarified,and the assumptions in this paper are proposed.Use stata13 for empirical tests to verify whether the assumptions in this paper are true.