Research On The Impacts Of Internal Control Effectiveness On Its Growth Of The GEM Listed Companies

Frequent occurrence of internal control failure led to the failure of the company's business in world capital market,such as Enron and Yin Guangxia events.This not only brings serious consequences to the enterprise itself,but also leads to the instability of the entire society.Therefore,the occurrence of such incidents has caused the government and regulators attach great importance.Countries began to strengthen the building of internal control.China promulgated the "Basic Norms of Enterprise Internal Control" in May 2008.It is intended to enhance the overall effectiveness of internal controls throughout the market,stabilize social and economic order.As China strengthens its policy support for small and medium enterprises,more and more small and medium enterprises choose to list on the GEM.And showed a good growth and development trend,gradually became an indispensable new force in the national economic construction.As the GEM listed companies with high risk,high growth characteristics.If we do not control the internal management,we must face great risks.Therefore,the internal control regulation should be more stringent requirements,otherwise it will be derived from a series of questions.Thereby affect its capital operation and stock investment,ultimately hinder the growth of the company.This article takes Shenzhen GEM listed companies as the research object,select the data from 2011-2015 as a sample.Select twenty four indicators of quantity and quality to measure the growth of enterprises with factor analysis.Select indicators from five target dimensions of internal control,use arithmetic mean to measure the effectiveness of internal control.Three hypotheses of this paper are put forward based on three theories.At the same time,through descriptive analysis,correlation analysis and linear regression analysis and other methods to study whether the effectiveness of internal control will have a certain impact on the company's growth.In order to improve the accuracy of the study,this paper are set asset-liability ratio,firm size,ownership concentration and other factors affected the company's growth as control variables.Secondly,add two intermediate variables,attributes of industry and growth stage.To study whether the effect of internal control effectiveness on firm growth is related to the stage of growth and the industry in which the enterprise is located with the quantile regression techniques.Finally,use the Tobin'Q instead of the composite index of firm growth for robustness test.After analyzing the empirical results,the completion as follows:Internal control effectiveness of enterprises has a positive role in promoting its growth and showed a significant U-shaped relationship at different stages of growth.There is a difference between the effective internal control in the same industry and the positive promotion of growth,andthe information technology industry is larger than that of other industries.Compared with the enterprises in their mid-growth stage,in the early stage of growth and high-speed growth stage,the effective internal control is more positive for growth.Finally,list a series of suggestions to enhance the effectiveness of internal control and growth from both the government and enterprise levels,and put forward the innovations,research deficiency and prospect of this article.Through the systematic research,hope to provide the reference for the GEM listed company to improve the efficiency of internal control design and implementation,and then improve the growth of enterprises.