Research On The Relationship Between Regional Risk Culture And Internal Control Quality

There are two systems in modern social governance: formal system and informal system.These two systems can not be separated,they should be complementary to each other.The so-called complementary relationship means that where the formal system is not perfect or dominant,the informal system guides people's behavior,and where the informal system has defects,the formal system regulates them.This paper focuses on the complementary relationship between the formal system and the informal system in the corporate governance system,and studies whether the formal system can play a normative role in reducing the negative impact of the informal system on the company where the informal system has potential harm to the company's operation.Specifically,this paper takes "regional risk culture" as an informal system and "internal control system" as a formal system.Through theoretical and empirical research,it is found that: in areas with high risk culture level as a whole,enterprises are more prone to risk behavior.At this time,the corporate governance level will raise awareness,actively set up and implement effective formal system "internal control system" to regulate risk behavior,so as to make up for the negative impact of informal system "regional risk culture".This conclusion provides evidence for the complementary relationship between formal system and informal system.To a certain extent,it shows that formal system can play a normative role to make up for the adverse consequences of informal system,and provides ideas for modern corporate governance and social governance.Around the research topic of "the relationship between regional risk culture and internal control quality",this paper selects the internal control index plus 1 of Dibo internal control and risk management database The natural logarithm is used to measure the quality of internal control,the proportion of per capita welfare lottery and sports lottery sales in per capita GDP is used to measure the risk culture of a region,and the research method of combining theoretical analysis and empirical research is used to discuss.First of all,in the part of theoretical analysis,we mainly use two theories "New Institutionalism Theory" and "internal control theory",and then deduce the possible relationship between regional risk culture and internal control quality according to the two theories and existing literature research results.In the research hypothesis part,using the conclusions of the new institutionalism theory and internal control theory,and focusing on the risk management function of internal control,that is,a good internal control system is conducive to deal with the risk behavior of enterprises and improve the ability of enterprise risk management,this paper puts forward the hypothesis one;and using the existing research results and the supervision distance hypothesis,this paper analyzes the distance between the CSRC and the company Whether the difference of distance will affect the relationship between the regional risk culture and the quality of internal control,and put forward the second hypothesis of this paper.Secondly,in the part of empirical analysis,this paper selects2008-2018 listed companies in Shanghai and Shenzhen stock markets as research samples,and finds that:(1)there is a positive correlation between regional risk culture and internal control quality,that is,in areas where risk culture prevails,enterprises will develop good internal control system to deal with risk behavior and strengthen their own risk defense ability.(2)When the company is further away from the SFC,the positive correlation between regional risk culture and internal control quality is not significant.In addition,in order to ensure the correctness of the conclusions of this paper,a series of robustness tests are carried out,and the final regression results show that the research hypothesis is still valid.Finally,this paper puts forward policy suggestions and further research direction according to the research conclusions.