Research On The Correlation Between Board Characteristics And Internal Control Index

In recent years,people have gradually paid attention to the importance of internal control.However,many studies only focus on qualitative rather than quantitative aspects of internal control.At the same time,as a functional organization closely linked with internal control,the board of directors lacks a comprehensive and systematic study on its impact on internal control.Therefore,this paper selects the two to study,on the one hand,to make up for the research gap,on the other hand,it also provides practical opinions for the internal control of enterprises,thus contributing to the improvement of their internal control level.This paper consists of five parts,which systematically discusses the characteristics of the board of directors and the internal control index.First of all,this paper studies and draws lessons from excellent academic achievements at home and abroad,which has laid a solid theoretical foundation for the article.Then,this paper further puts forward assumptions and analyzes and tests these assumptions through empirical methods.The first part is an introduction.Basing on the current accounting,internal control policies and market environment,the introduction presents the research background of the article.Useful internal control is very important to enterprise management.The board of directors is a functional organization established and appointed by shareholders to supervise and control the management activities of the enterprise management.The internal control is mainly "led" by the board of directors and implemented by managers.Therefore,the board of directors is an important part of influencing the internal control of the enterprise.In recent years,the lack of independence of the board of directors is very common in our country.At the same time,the single structure and unclear division of responsibilities are also the key problems faced by the board of directors.Because of the above problems,the characteristics of the board of directors have attracted more and more attention from the society,and companies are also continuing their efforts to standardize the board of directors.The board of directors system and the enterprise's internal control system both play a supervisory role.Many domestic scholars have made detailed researches on them respectively,but they have usually separated the two.There is insufficient discussion on the correlation between the characteristics of the board of directors and internal control.Therefore,it is necessary to study this topic.The second part is a literature review,which first integrates the relevant literature on the characteristics of the board of directors so as to make it clearer.The characteristics of the board of directors are mainly characterized by the size of the board of directors,the combination of two posts,the proportion of sole directors,the number of meetings,etc.Then it reviews the relevant research results of internal control index.There are mainly three methods to describe it.One is the index under the target,the other is the index under the information disclosure,and the other is the index under the control defect.After that,the article classified and sorted out the literature on the correlation the board of directors' characteristics and the internal control index,and initially believed that the characteristics of the board of directors were related to the internal control index of the enterprise.The third part is theoretical analysis and research assumptions.The article introduces the relevant theories related to the board characteristics,internal control index and the influence of board characteristics on internal control index,mainly including: internal control theory,principal-agent theory,housekeeping theory,etc.Then,by analyzing previous scholars' research and combining the above theories,ten hypotheses of the article are obtained.The fourth part is research design,which shows the empirical thinking of the article.The research of internal control index in this paper draws lessons from the research method of internal control index based on goal orientation in Lin Bin,and divides internal control objectives into: legal compliance,asset safety,reliable reporting,business objectives and strategic realization.The explanatory variables include: the vacancy rate of independent directors,the frequency of the board of directors,the size of the board of directors,whether the two positions are in one,the proportion of independent directors,the stability of members,board shareholding ratio,the remuneration of directors,the proportion of female directors,and the average educational background.Ten variables are used to represent the board of directors' characteristics.Select the overall size of the company,the board of supervisors' size,the nature of the enterprise(state-owned enterprises are not state-owned),the degree of equity concentration and the degree of equity checks and balances as control variables.This paper uses linear regression to build a model for empirical analysis.The fifth part is empirical analysis.Including descriptive statistics,correlation,multicollinearity test,regression and robustness test.The research conclusion shows that the internal control index is negatively related to the vacancy rate of independent directors.It is negatively related to the meeting frequency and is positively related to directors' remuneration;It is positively related to the board of directors' shareholding ratio.It is positively related to the proportion of female directors.It is positively related to the average educational level of the board of directors.Finally,according to the above empirical results,the article make some feasible recommendations,such as laying importance on the quality of board meetings;improve directors' incentives,such as salary incentives and equity incentives;intended to increase the proportion of female directors on the board and the overall average educational level etc.The full text comprehensively measures the characteristics of the board of directors and innovatively applies it to the research process of the relationship between the board of directors and the internal control index.Throughout the full text,the internal control index of target realization is composed of basic target data,which is very convincing.At the same time,this paper is more systematic and comprehensive on the characteristics and measurement of the board of directors,so the research results are representative.