Research On The Influence Of Internal Control Quality On Cash Flow Risk Of Listed Companies

In the post-financial crisis era,the financial management concept of “cash is king” has returned again.The top management of enterprises has paid more attention to the management of cash flow.At present,Chinese enterprises are shouldering the historical responsibility of completing strategic transformation and upgrading,how to prevent and respond to potential The cash flow risk has become the focus of attention of all sectors of society in China at this stage.In 2015,the State-owned Assets Supervision and Administration Commission(SASAC)took the lead in issuing the ? Notice on Further Improving the Relevant Issues Concerning the Increase in Income and Savings of Central Enterprises?and clarified the requirements for strengthening cash flow management.However,the guidance of relevant policy documents is important for the prevention of cash flow risks,but more should be based on the enterprise itself,establish a good supervision and balance mechanism,and take corresponding strategic measures to practice guidance,which is expected to be fundamentally realized.The possibility of cash flow risk generation.With the continuous improvement of the internal control system of the enterprise,its risk prevention and control functions have become increasingly prominent.Internal control has become the central system of comprehensive risk management of enterprises.Cash flow risk is one of the main risks related to the survival of the company.Natural and internal Control is closely related.Studies have shown that one of the main reasons for the cash flow risk is the unbalanced cash inflow and outflow ratio caused by the self-interested behavior of the management,the invalid investment and the short-selling behavior of the controlling shareholder.The essence is the agency problem.The internal control system is an indispensable important system for modern enterprises.The nature of checks and balances and supervision can effectively restrict the private interests of shareholders and managers,reduce agency conflicts,and reduce cash flow risks.In addition,due to the different nature of property rights,the internal control quality and agency conflicts of state-owned enterprises and non-state-owned enterprises are inevitably different.The existence of soft budget constraints also makes the cash flow risks faced by enterprises under the two property rights different depending on the “enterprise”.Based on the above theoretical analysis and realistic background,and taking into accountthe availability of the required data,this paper selects all listed companies of China Shanghai and Shenzhen A-shares from 2008 to 2017 as the initial research samples,and treats the initial samples with reference to the practices of most scholars.Firstly,the paper analyzes the impact of internal control quality on cash flow risk by using relevant theories.Secondly,it summarizes the internal control quality and cash flow risk status of listed companies in China.Finally,the internal control quality and cash flow are analyzed in detail by constructing an empirical model.The impact of risk and the mediating effect of two types of agency costs,and accordingly put forward corresponding conclusions and recommendations.The results of this paper show that: 1.The improvement of internal control quality can significantly reduce the cost of two types of agency and reduce the risk of cash flow;2.The two types of agency costs play a partial intermediary role in the impact of internal control on cash flow risk,and Under the same conditions,the intermediary function is more significant in non-state-owned enterprises;3.Under different property rights,the degree of internal control quality has different impact on cash flow risk.Under the same conditions,the quality of internal control in non-state-owned enterprises is improved.More likely to reduce the risk of cash flow.