The Influence Of External Audit And Internal Control On The Corporate Inefficient Investment

The investment decision and efficiency of enterprises not only affect the financial security and operation safety of enterprises,but also affect the judgment of enterprise value.Therefore,improving the investment efficiency of enterprises is a necessary way to improve the performance of enterprises and achieve better development.However,due to the unbalanced development of China's market economy,the low level of corporate governance,imperfect management mechanism and other factors,the enterprises in China generally have the phenomenon of inefficient investment,which is specifically manifested as over-investment and under-investment.This phenomenon obviously affects the improvement of the quality of enterprises and the healthy development of the capital market.Enterprise internal control system can be spread to every corner of the enterprise,the major decisions made by the enterprise have the shadow of internal control,therefore,internal control is an important link of corporate governance,and it has a certain impact on the non-efficient investment of enterprises.In addition to the internal governance of the company,the audit generated in response to the separation of ownership rights and management rights will exert an external supervision effect on the enterprise,and it can not be underestimated to restrain the non-efficient investment behavior of enterprises.Domestic and foreign scholars have respectively studied the impact of the above two on the non-efficient investment of enterprises,However,whether the two factors can play a role at the same time is mainly to study the earnings management of enterprises,and there are few studies on the joint effect on the non-efficient investment of enterprises.This paper studies the influence of internal control and external audit on the non-efficient investment of enterprises,hoping to find a way to reduce the non-efficient investment of enterprises in order to better serve the capital market and social economy.This paper adopts the research method of combining theory and demonstration,and reviews domestic and foreign literatures,sorts out the relationship between internal control,external audit and enterprise non-efficient investment,and makes theoretical analysis on the three factors.Then the sample data of a-share manufacturing industry of Shenzhen stock exchange from 2012 to 2017 were used for empirical analysis.Research has shown that:(1)Other things being equal,high quality audit will inhibit the non-efficient investment of enterprises;(2)Other things being equal,high quality internal control will inhibit the non-efficient investment of enterprises;(3)Other things being equal,there is a substitution relationship between internal control and external audit in restraining non-efficient investment.