From the perspective of the effectiveness of internal control, this study analyzes the influence of internal control on innovation performance and internal control on corporate social responsibility (CSR), and then analyzes the intermediary effect of CSR between internal control and innovation performance. On basis of the comprehensive monitoring, the effective internal control is adopted to supervise and correct the process of production and operation, so as to ensure that the operational risks are evaded sufficiently. The effective internal control not only alleviates the conflict of interest caused by those uncoordinated governance structure, but also reasonably guarantees the efficiency of business activities, the reliability of financial reports and the compliance with laws and regulations. Section 404 of the Sarbanes-Oxley Act (SOX 404) requires companies to review their ICFR and declare whether they are "effective" or "ineffective". Internal control and technological innovation are of great significance to the survival and development of enterprises. The possible contribution of this study is as follows. Competing interests: The author has declared that no competing interests exist. The above results show that the operating income, liabilities and growth of listed enterprises in China are different. Accordingly, the statistical results of the fixed-effect model are shown in columns 4 and 5 of Table 5. And the coefficient on FCSR is positive and significant (0.015, p < 0.01). For full functionality of this site, please enable JavaScript. LSDV method is used to analyze model 1, and the null hypothesis that the coefficients of all individual dummy variables are zero is rejected, indicating the existence of individual fixed effect. The coefficient 1 in model 2 refers to the effect of internal control (IC) on the intermediary variableSocial contribution per share (SCPS). (2018) [71] is referenced. 10Research and Development aims to promote enterprises to achieve the independent innovation, enhance their core competitiveness, effectively control the risk of R&D activities, and promote the strategy of long-term development. The coefficient on LnASSET is positive and significant (0.319, p < 0.01), implying that those large-scale enterprises often have strong R&D strength, which is conducive to improving their innovation performance. Furthermore, internal control defects are used as the correction variables to modify the basic index, and then DIB internal control index is formed that comprehensively reflects the level of internal control and ability of risk control of listed enterprises. When an enterprise files an application, the patent can only become the real intellectual property of the enterprise after it is officially authorized. Panel data analysis has a certain advantage for alleviating the endogenous problem caused by missing variables that do not vary with time. The total score of CSR performance is weighted in the above five aspects, with a maximum of 100 points. access. The results show that the enhancement of the effectiveness of internal control is conducive to improving innovation performance, which comes from the supervision and motivation of internal control during the implementation of innovation projects, reducing those inefficient R&D projects, and strengthening the efficiency of innovation activities to improve innovation performance. For state-owned enterprises, the positive effect of internal control on innovation performance should remain the focus of regulators work in the future. (2012) [72], Chen et al. Among the wide class of impulsive dynamical systems, we Enterprises should build a governance mechanism to actively carry out CSR activities on basis of reshaping the governance structure to strengthen their internal system. effective, C) controls that deal with monetary compensation for employees Internal controls are the security policies, procedures and tech that businesses and governments use to help prevent employee theft and financial . As an institutional arrangement, internal control aims at reasonably ensuring the legal operation and compliance, safety of assets, and reliability of financial information, improving the efficiency and effect of operations, and thus promoting the realization of the development strategy of enterprises. 4Social Responsibility has embedded CSR into the system of internal control. The remainder of this paper is organized as follows. Based on the principle of one-to-one correspondence and near-neighbor matching without replacement, a total of 1536 pairs of paired observations are obtained. Therefore, from the authority and universality of indicators, this study refers to the research design of Fan et al. In this study, the effectiveness of internal control systems in accommodation businesses is evaluated and the impact of organizational structure culture on the internal control system is tried to be measured. As shown in columns 2 and 3 of Table 5, in the state-owned sample, the coefficient on the explanatory variable (IC) is not statistically significant (0.008, p > 0.10). Study with Quizlet and memorize flashcards containing terms like Who has the responsibility to design and maintain a system of internal control that provides reasonable assurance that assets and records are properly safeguarded, and that the entity's information system generates information that is reliable for decision making? The Board is required to summarise the process applied in reviewing the effectiveness of the system of risk management and internal controls and explain what actions are being taken to remedy any significant failings or weaknesses. On basis of the relevant studies of Belloc (2012) [19] and Chen et al. The optimization problem considered consists of a worst case quadratic performance criterion over a finite set of linear discrete-time models subject to inequality constraints on the states . Statistical results of regression coefficients for model 1model 3. The results show that the improvement of CSR performance is a positive driving factor for strengthening innovation performance, and CSR activities take an intermediary effect in the process of internal control to improve innovation performance. The goal of corporate governance has experienced a process from the maximization of profit to the maximization of shareholder equity, and then to the maximization of stakeholder benefit. Hypothesis 2 above is verified. In accordance with the PSM samples, LSDV method is used to analyze model 1model 3, and the null hypothesis that the coefficients of all individual dummy variables are zero is rejected, indicating the existence of individual fixed effect. Essentially, companies must determine if their ICFR are adequate enough to produce financial statements that are complete and accurate. This study expands the mechanism of internal control, CSR activities and innovation performance, and enriches the existing literature on the relationship between internal control and innovation performance. Some scholars have shown that internal control effectively prevents various risks in the process of technological innovation through the reasonable risk assessment, control and prevention [15, 16]. Finally, it is suggested that state-owned enterprises and non-state-owned enterprises should communicate and cooperate, strengthen the construction of internal control system, and improve innovation performance and CSR practices. M5 represents the cash paid for goods purchased and services received. Table 3 presents the correlation coefficients of variables. However, in state-owned enterprises, internal control has not yet shown a significant promoting effect on innovation performance. The improvement of the effectiveness of internal control can enhance the sustainable development of enterprises to a certain extent [3]. In the non-state sample, the coefficient on DUAL is positive and significant (0.305, p < 0.01). Where, the coefficient 1 in model 1 is the total effect of internal control (IC) on innovation performance (LnPATENT). As shown in column 4 of Table 6, the coefficient on IC is positive and significant (0.022, p < 0.10). This mitigates against the risk of inefficiencies and threats to the creation of value in the organisation. The operation mode, operation management and supervision of state-owned enterprises and non-state-owned enterprises are not the same, and there are some differences in the efficiency of technological innovation and CSR activities. It is necessary to explore the scientific and technological cooperation among those cross-ownership enterprises, identify the opportunities related to CSR strategies, and integrate the R&D behaviors into CSR strategies. The effective internal control has a spillover effect, which not only affects the production and operation of enterprises themselves, but also affects all stakeholders. The social responsibility behavior based on stakeholder orientation is conducive to establishing and maintaining a good relationship between enterprises and stakeholders, and supports enterprises to obtain the necessary operational resources from stakeholders [47, 48]. But internal controls can also address other problems that affect an Internal control B. Literature review revealed that research studies are carried out based on regions or individual business entities. CSR activities mean to satisfy the value demands of stakeholders, thus maintaining the relationship between enterprises and stakeholders. This result, to some extent, supports hypothesis 1 above, indicating that the effective internal control is conducive to improving enterprises innovation performance. The enhancement of the effectiveness of internal control is conducive to the significant improvement of CSR performance. Besides, Akisik and Gal (2017) [82] studied the relationship among CSR reports, internal control and financial performance. This also indicates that state-owned enterprises should strengthen the positive effect of internal control on technological innovation. Chinese Application Guidelines for Internal Control No. Table 1 presents the name and calculation method of each variable. Therefore, CSR activities promote a good relationship between enterprises and external stakeholders, and then help enterprises acquire the knowledge and technology owned and accessible by these stakeholders, so as to improve the performance of technological innovation. But the risk of social responsibility arising from stakeholders must not be ignored. However, the standard deviation of IC is 128.960, and the maximum (minimum) of IC is 863.140 (0.000). Hypothesis 2. It is a means by which an organization's resources are . Robustness test results before properties are distinguished. The data are obtained from China stock exchange database, Wind database, and DIB internal control and risk management database. The behavior control has a positive moderating effect on the relationship between experimental learning and indigenous innovation [31].
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