The Influence of Internal Control Quality on Enterprise Performance of Chinese Listed Companies

Abstract

With the further deepening of the internationalization of Chinese capital market, the various risks faced by enterprises are becoming more and more serious. Internal control can help companies reduce risks and provide effective protection to achieve strategic and operational goals. Therefore, research on the relationship between internal control quality and enterprise performance will help increase enterprises’ attention to internal control, and will promote the development of internal control in China.Based on the internal control objectives, this paper studies the relationship between internal control quality and enterprise performance. Taking the data of 2012-2018 of listed companies in China as the research sample, the empirical research and analysis are carried out by means of entropy method, regression analysis and robustness test. The results show that the completion degree of the five objectives of internal control is significantly positively correlated with enterprise performance and the quality of internal control is significantly positively correlated with enterprise performance. Finally, based on the conclusions, this paper proposes some suggestions for improving the internal control quality.