Study On The Impact Of Mandatory Internal Control Audit On Sustainable Development Ability Of Enterprises

With the continuous improvement of China’s economic development level,the sustainable development of enterprises has gradually become the focus of attention.As the basic subject of economic development and social progress,enterprises have a profound impact on China’s economic development.However,in the process of its rapid development,it is inevitable that it will cause various environmental,safety,quality and other problems because of ignoring its own sustainability.Therefore,the short life cycle of the enterprise and the difficulty of sustainable development become the major problems faced by the enterprise in the process of development.As a national means,mandatory internal control audit can improve the effectiveness of internal control of enterprises,improve their risk prevention and management capabilities,and strive for more initiatives for enterprises to cope with risks,seize opportunities,and enhance sustainable development capabilities.At the same time,it can also,to a certain extent,alleviate the problem of information asymmetry between users and disclosures,improve the trust value of enterprises,alleviate the problem of difficult and expensive financing for enterprises,and provide financial guarantee for the sustainable and healthy development of enterprises.So,has the mandatory internal control audit policy given full play to its effectiveness since its implementation? Can we effectively improve the sustainable development ability of enterprises? Does the external financing constraint play a mediating role between the two? Can the internal control quality and governance structure of the enterprise play a regulatory role between the two? In this regard,this paper conducts an analysis and research to provide a reference for the policy implementation effect of mandatory internal control audit on improving sustainable development capacity.This paper first collects and summarizes the existing research results at home and abroad on the mandatory internal control audit,financing constraints and the sustainable development ability of enterprises,extracts the research points of this paper,and uses the information asymmetry theory,signal transmission theory and principal-agent theory on the basis of the existing research to explain the research direction of this paper and put forward research hypotheses.In the empirical part,we selected the A-share listed companies on the main board of Shanghai and Shenzhen of China from 2009 to 2021 as a sample,took the Notice on the Implementation of the Standard System of Enterprise Internal Control by Classification and Batch by Main Board Listed Companies in 2012 as an exogenous event,and according to the relevant provisions on the implementation of the internal control audit policy by classification and batch,adopted the multi-time point double difference method to construct a mandatory internal control audit The model of the relationship between financing constraints and the sustainable development ability of enterprises,from the perspective of macro policy,deeply analyzes the mechanism of mandatory internal control audit on the sustainable development ability of enterprises.The study found that mandatory internal control audit can help improve the sustainable development ability of enterprises,and financing constraints play a part of intermediary role between the two,that is,the mandatory internal control audit system can improve the sustainable development ability of enterprises by reducing the restriction of financing constraints on the sustainable development of enterprises.In addition,this paper also uses parallel trend test,placebo test and PSM as robustness tests to ensure the robustness and reliability of research conclusions.Finally,from the perspective of enterprise characteristics,the paper further analyzes the regulatory role of enterprise internal control quality and governance structure on the relationship between mandatory internal control audit and enterprise sustainable development capability.Through research,the role of mandatory internal audit in improving the sustainable development ability of enterprises is more obvious when the internal control quality of the audited company is high and the corporate governance is good.Finally,put forward targeted policy recommendations that are conducive to the sustainable development of enterprises.First,auditors should improve the efficiency and effectiveness of internal control audit,ensure high-quality implementation of audit activities,give full play to the supervisory role of internal control audit,and ensure the effective operation of internal control of enterprises;Secondly,the regulatory authorities should strengthen supervision,actively urge the implementation of the mandatory internal control audit policy,and carry out in-depth publicity and guidance of relevant systems and policies for enterprises.Enterprises should also actively respond to national policies;In addition,the legislature or the State Council can issue relevant laws or administrative regulations as the institutional guarantee to give the mandatory internal control audit related issues normative legal force.