Empirical Study Of No Actual Controller,Audit Fee Level And Internal Control Quality

In China's capital market,it is a common phenomenon for listed companies to have controlling shareholders or actual controllers.It has been suggested that major shareholders' involvement in corporate governance can improve the incentive mechanism for managers,reduce agency costs,and contribute to the improvement of corporate performance.However,in recent years,in the Shanghai and Shenzhen stock markets,there is a trend of increasing the number of companies without controlling shareholders or actual controllers.Some listed companies have disputes over control rights,and even caused confrontation between shareholders and management,which has adversely affected the effective operation of the company's daily operations and internal control,and has attracted great attention from all parties.It has aroused great concern from all parties.In 2017,the CICPA interviewed accounting firms,indicating the possible risks of undertaking internal control audit business of listed companies without controlling shareholders and actual controllers.Then,is the actual controller's absence a positive or negative impact on the company's internal control? Compared with companies with actual controllers,will the control environment and internal control quality of listed companies without actual controllers be significantly different?Based on this background,this paper focuses on the internal control quality of China's listed companieslisted companies in China without actual controllers.The purpose is to examine the effectiveness of internal control of such companies,find out the existing governance risks,and provide new empirical evidence for the governance role played by actual controllers.The evidence also indicates that there may be no risk to the actual controller company,which provides a reference for investors to prudently invest and the accounting firms to collect reasonable audit fees.This paper mainly includes three aspects of research content: First,it summarizes the development status and characteristics of listed companies without actual controllers in China,and analyzes the impact of the situation of no actual controllers on internal control;Second,empirically study the relationship between no actual controller,audit fee level and internal control quality,verify the impact of the absence of actual controller on internalcontrol of the company,and use audit fee level as evidence;Third,in order to improve the effectiveness of internal control of the company without actual controllers,protect the interests of investors and ensure the quality of audit,effective countermeasures are proposed from the internal and external mechanism of the company,investor protection infrastructure,CPA audit and other aspects.The empirical study found that the internal control index of the listed companies without actual controller is slightly lower than that of listed companies with actual controllers.But it is not significant,that is,the quality of internal control is low.At the same time,the actual paid audit cost of that year is significantly higher than that of listed companies with actual controllers,which proves from the side that the control risk of companies without actual controllers is higher,and accounting firms may charge higher audit costs as risk and resource compensation.Based on this,it is concluded that the actual controller's participation in corporate governance is conducive to improving the quality of internal control.However,the establishment of a sound internal control system and the supervision and balances between shareholders can offset the adverse effects of the lack of actual controllers.The quality of internal control without actual controllers is not as bad as the public imagined.