Study of Factors for Internal Control Effectiveness of Listed Companies

Abstract

With the increasing and expansion scale of listed companies, effectiveness of internal control for listed companies has been gradually taken seriously. Effectiveness exaltation of internal control for listed companies to maximize enterprise value and rights protection of investors and stakeholders to strengthen government supervision over listed companies are of great significance. In this paper, based on previous study in effectiveness of internal firstly, effectiveness of internal control for listed companies is defined. Then factors affected effectiveness of internal control are studied to provide reference for future research, which will further promote sound and healthy development for internal control mechanisms of Listed company. 1. The Internal Control Effectiveness of Listed Companies 1.1 The connotation of internal control effectiveness of listed companies The effectiveness of internal control based on internal controls to ensure that the degree or level to achieve the objectives of the relevant offer. If the level of assurance in effective internal control interval, the internal controls are effective; if not ensure the level of internal control within the range, the internal controls are ineffective guarantee (1) . Effectiveness of internal control has two meanings: one refers to the company's internal control policies and measures are not inconsistent with national laws and regulations of the place; the second refers to enterprises to improve rational design of internal control framework can be very in enterprise production and business activities good to implement and can improve production efficiency, while providing true and reliable financial data to internal and external audit (2) . Effectiveness of internal controls can help companies achieve effective internal control objectives; internal control is an important guarantee to achieve the objective. From this perspective, process effectiveness of internal controls can be divided into the effectiveness of internal control design and operation. 1.2 The content of internal control effectiveness of listed companies Internal control assessment carried out two aspects should control the design and effectiveness of internal control operation from the inside. According to China's 2008 release of basic norms of internal control, the effectiveness of internal control design can be evaluated from the perspective of the five elements of internal namely: internal environment, risk assessment, control activities, information and communication, and internal oversight (3) . The effectiveness of internal control and operation of internal control goals places or not to measure, these five goals are: compliance objectives, asset security objectives, reliability of financial reporting objectives, business objectives, and strategic goals.