Research Article
The Relationship between Internal Control and Enterprise Performance
@INPROCEEDINGS{10.4108/eai.15-12-2023.2345374, author={Yuxi Wang}, title={The Relationship between Internal Control and Enterprise Performance}, proceedings={Proceedings of the 3rd International Conference on Public Management and Big Data Analysis, PMBDA 2023, December 15--17, 2023, Nanjing, China}, publisher={EAI}, proceedings_a={PMBDA}, year={2024}, month={5}, keywords={financial performance; internal control; major shareholders’ shareholding ratio ; property right nature}, doi={10.4108/eai.15-12-2023.2345374} }- Yuxi Wang
Year: 2024
The Relationship between Internal Control and Enterprise Performance
PMBDA
EAI
DOI: 10.4108/eai.15-12-2023.2345374
Abstract
In the current fierce competitive environment, the good performance and profitability of enterprises are bound to be the competitive advantages for good operation. If a company has a sound internal control system, its activities will be strictly supervised, and operating efficiency or financial performance will be improved thanks to reasonable regulations. Additionally, the shareholding ratio of major shareholders may affect the improvement of financial performance by internal control. The paper takes China's A-share listed companies from 2012 to 2020 as samples, uses Excel and Stata software to process data, establishes a model based on theoretical basis and makes empirical analysis, and draws the following conclusions: firstly, higher internal control quality will improve the financial performance of enterprises; Second, a higher shareholding ratio of major shareholders will inhibit the improvement of financial performance by internal control; Third, there are marginal differences in internal control effects of different property rights, and the promotion effect is more significant in non-state-owned enterprises.