But internal controls can also address other problems that affect an The regression estimation of panel data for parameters is conducted, respectively, to test the above hypotheses 1, 2 and 3. The Hexun is a subsidiary of China securities market research and design center. "Efficiency of internal control systems and the effect of The significance of CSR activities lies in the transcendence of the governance model of shareholder supremacy. These reported results of correlation coefficients ensure the rationality of model 1 and model 3 above. From the people-oriented concept, as the stakeholders of enterprises, R&D personnel are treated fairly and with high quality, and become the direct beneficiaries of CSR activities. The results show that the improvement of the effectiveness of internal control has a significant promoting effect on innovation performance, and promotes enterprises to strengthen CSR performance. During the observation period, the external auditors take a positive attitude towards the legality and fairness of financial reports of nearly 98.40% of the sample enterprises, which ensures the reliability of the data used in this study. Internal Control Weaknesses Following an IPO | Internal Control Accordingly, the statistical results of the fixed-effect model are shown in columns 6 and 7 of Table 5. Besides, to alleviate the endogenous problem caused by the reverse causality, the control variables including R&D, ROA, LER, GROWTH, LNSALARY, DTL and AUDIT are taken as the first-order lag values. The sample data shall be excluded according to the following criteria. In order to ensure the reliability of the analysis results, the measurement methods of core indicators are changed again in the robustness tests for the state-owned and non-state-owned samples. Table 2 reports the descriptive statistical results of variables. Also, it is shown in Table 3 that the maximum absolute value of the correlation coefficients is 0.437. Abstract: This paper describes how to efficiently solve a robust optimal control problem using recently developed primal-dual interior-point methods. The coefficient 1 in model 2 refers to the effect of internal control (IC) on the intermediary variableSocial contribution per share (SCPS). Enterprises acquisition and utilization of knowledge promote the development of technological innovation ability. A properly designed and consistently enforced system of operational and financial internal control helps a bank's board of directors and management to safeguard the bank's resources, produces reliable financial reports, and complies with laws and regulations. Besides, the existing literature tends to study the relationship between internal control and CSR performance. Meanwhile, the degree of equity concentration will affect the principal-agent relationship among stakeholders and determine the distribution of control rights of listed enterprises. Otherwise, the value is 0, indicating that the effectiveness of internal control remains unchanged or decreases. Similar to traditional FS organizations, a robust governance infrastructure should have 'three lines of defense'. Internal controls make sense within each organization's unique operating environment. Section 5 presents the model regression analysis. The median of SHRCR is 55.13%, and the average shareholding ratio of top 10 shareholders in the sample enterprises is 55.21%. Therefore, the ownership concentration (SHRCR) is taken as a control variable to evaluate its possible impact on enterprise innovation performance and CSR practices. Furthermore, the intermediary effect of CSR activities in the process of improving innovation performance through internal control should be brought into play, so as to return the expectations and demands of stakeholders. Enterprises with different property attributes should work together to establish the R&D centers, make the major technological breakthroughs in R&D activities, improve their innovation performance to reward stakeholders expectations and demands, and maintain the close ties with all stakeholders. Different from the matching of a single indicator, the propensity score matching (PSM) condenses multiple features into a propensity score value, thus facilitating the overall matching of multiple features to obtain the same or similar matching samples in terms of the main characteristic variables, so as to reduce the adverse impact of other possible interfering factors on the conclusions. Hypothesis 1 above is verified again. In the implementation of internal control, the relationship between institutional control and flexibility should be dynamically balanced, the content and proportion of each control element should be refined, and the formalization of institutional construction and management rigidity should be avoided. If these characteristic variables also affect enterprise innovation performance and CSR performance, the relationship between internal control and innovation performance observed in the previous whole-sample analyses may be interfered with. The coefficient 2 in model 3 refers to the effect of the intermediary variable (SCPS) on the explained variableinnovation performance (LnPATENT) after the effect of internal control (IC) is controlled. Optimal & Robust Control generally refers to that broad class of control systems that encompasses the most of Mechanical Systems, Servo systems, Aerospace Applications, etc. The principles of effective internal control should ensure that: Internal controls benefit rather than encumber management. In the state-owned and non-state samples, the coefficients on L.ROA are positive and significant (1.525, p < 0.10; 2.487, p < 0.01). For the control variables, in model 1 and model 3, L.ROA, DUAL and LnASSET have convergent conclusions with the corresponding variables in Table 4 above. PDF Maintaining a robust risk and control framework - Halma Compliance C. Reporting D. Risk assessment Click the card to flip With reference to the research of Guan and Gao (2009) [66], Berchicci (2013) [67], Maggitti et al. The coefficient on SCPS is positive and significant (0.135, p < 0.01), indicating that the strengthening of CSR practices will be a positive driving factor to enhance innovation performance. In this way, CSR performance is measured again. Literature review revealed that research studies are carried out based on regions or individual business entities. The data are obtained from China stock exchange database, Wind database, and DIB internal control and risk management database. Internal control promotes the optimization of capital allocation efficiency, thus promoting the realization of sustainable growth. A robust control system, comprising effective internal control, risk management and audit, is fundamental to better governance, safeguarding of taxpayers' money, and to preserving public trust. 1 2/1 = 0.0480.086/0.068). And the coefficient on LnASSET is negative and significant (-0.173, p < 0.05). (2018) [71] is referenced. Section 4 discusses the descriptive statistics and correlation of variables. They are woven into day-to-day responsibilities of managers. The behavior control has a positive moderating effect on the relationship between experimental learning and indigenous innovation [31]. Internal controls are not stand-alone practices. Once again, these results show that the positive effect of internal control on technological innovation is restricted by the property attributes of enterprises. Using a questionnaire survey of sixteen listed banks, the extent of ICS compliance and its impact on various indicators of financial performance is examined, such as profitability, earnings, and returns on sustainability initiatives. 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. As the output of innovation investment is characterized by uncertainty and untimeliness [10, 11], the sound internal control is needed to prevent those possible unclear R&D positioning, lack of capital management, and other moral hazard and adverse selection. Furthermore, FCSR is taken as the explained variable of model 2 and the intermediary variable of model 3 for the regression analyses again. In model 3, the coefficient on L.LER is negative and significant (-0.077, p < 0.10), suggesting that the higher debt pressure will take a negative impact on innovation performance. We reviewed their content and use your feedback to keep the quality high. What Are Internal Controls? 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. Hypothesis 2 above is initially supported. The improvement of CSR performance helps to obtain the information and resources needed in the process of technological innovation [50, 51]. The total score of CSR performance is weighted in the above five aspects, with a maximum of 100 points. The notice puts forward the indicator of social contribution value per share (SCPS) for the first time, providing a new and important benchmark for the comprehensive and objective evaluation of enterprises value creation. The implementation of internal control enables the management to effectively identify the external environmental risks, opportunities and internal resources through the risk assessment, select those high-quality innovation projects and improve the efficiency of innovation output. Affiliations: For model 3, this study distinguishes between the state-owned and non-state-owned samples. From the long-term perspective of internal control construction, enterprises should make greater efforts in CSR practices. The promotion of enterprises innovation ability depends on the effective input mechanism, and the integration of human capital and material capital into the innovation activities is often determined by the internal system of enterprises [19]. The higher the total score, the higher the level of fulfilling social responsibility, and the higher the enthusiasm to take social responsibility. The dummy variable (DIC) of IC is set as the explained variable of Logistic regression. 2) Physical controls are concerned with limiting And indicates the possible intermediary effect of CSR activities between internal control and innovation performance. Discover a faster, simpler path to publishing in a high-quality journal. Furthermore, model 5 (formula 8) with the interaction term is constructed. Fig 1 presents the research train of thought. Generally, the internal control can be taken as an institutional system of risk management. Table 3 presents the correlation coefficients of variables. 1 2/1 = 0.0640.135/0.046). CSR is a strategic move that helps to change stakeholders perceptions of enterprises and expectations of performance, deliver signals of performance improvement, and divert societys attention to enterprises [36]. When CSR activities involve the life field concerned by R&D personnel, they connect the work and life through CSR activities to achieve a benign transformation between the work environment and living environment, relieve pressure and discomfort at work, and gain the psychological benefits. Internal control should have the following objectives: Efficient conduct of business: Controls should be in place to ensure that processes flow smoothly and operations are free from disruptions. Then, the corresponding variables in the original model 1model 3 above are replaced again. CSR activities play an important role in the sustainable development [14]. The above results show that the operating income, liabilities and growth of listed enterprises in China are different. For model 2, in the non-state sample, the coefficient on IC is positive and significant (1.591, p < 0.05). For the control variables, the mean (standard deviation) of R&D is 4.42% (4.259), and the maximum (minimum) of R&D is 26.90% (0.07%), indicating that the proportion of R&D input in the operating revenue varies to a certain extent, and the emphasis of different sample enterprises on R&D business is obviously different. And in the non-state sample, the coefficient on IC is positive and significant (0.058, p < 0.05). 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. And after calculation, the effect size of the intermediary effect is about 5.49% (i.e. In this study, the percentage of R&D investment in operating revenue is adopted to evaluate the R&D investment intensity, to investigate its influence on enterprise innovation performance. Effective Internal Control Environment & Risk Assessment Meanwhile, the non-exclusivity of knowledge should be reasonably utilized to balance the private benefits and social benefits of innovators in the process of continuous operation [12]. Therefore, from the authority and universality of indicators, this study refers to the research design of Fan et al. The coefficient on L.GROWTH is positive and significant (0.201, p < 0.01), indicating that the better the development prospect of enterprises, the better the performance of social responsibility. But they are only preliminary analyses because the other factors that affect the explained variables are not included. Besides, Akisik and Gal (2017) [82] studied the relationship among CSR reports, internal control and financial performance. refers to the influence of internal control on CSR. Where, 12 is the product of the effect of IC on FCSR and that of FCSR on M_PATENT. (1) Internal control is an important factor influencing the innovation performance and CSR activities. 4Social Responsibility has embedded CSR into the system of internal control. Therefore, it is a strategic move for the management to control the operation risk at a reasonable level. In order to realize long-term interests, major shareholders tend to encourage enterprises to better carry out CSR activities. In general, a good accounting surplus is the material guarantee to improve innovation performance. In the control variables, the coefficients on L.ROA, DUAL and LnASSET are positive and significant (1.892, p < 0.01; 0.218, p < 0.01; 0.346, p < 0.01). Robust Governance - KPMG Global the proportion of R&D investment in operating revenue) are more concentrated in the period after 2011. For the control variables, in the state-owned sample, the coefficients on SHRCR and LnASSET are positive and significant (0.013, p < 0.01; 0.333, p < 0.01), implying that the moderate equity concentration and scale advantage are favorable motivations to enhance the efficiency of innovation output in state-owned enterprises. Table 1 presents the name and calculation method of each variable. Wang et al. e0234506. Firstly, the mechanism and characteristics of the voltage distortion are analyzed based on the impedance method. On this basis, the continuous variables are Winsorized with twoway 1% quantiles, to avoid the adverse effect of abnormal observations on the analyses. And the improvement of the effectiveness of internal control promotes enterprises to significantly improve CSR 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 internal control of non-state-owned enterprises takes a significant and positive effect on the performance of technological innovation. (2) ST, *ST class. Moreover, CSR activities convey shared values to R&D personnel, enabling them to express themselves more freely in their work [63], so as to obtain the value satisfaction benefits. (2017) [78], adds the marketization index of the registration place of listed enterprises (Marketization) as a covariate, and screen out the treatment group and control group. The conclusions of the study are as follows. 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]. Internal Control Environment Each organization must start by establishing its internal control environment. As shown in Table 6, in model 1, the coefficient on IC is positive and significant (0.025, p < 0.10), showing that the effective internal control is helpful to improve the efficiency of innovation output. In the non-state sample, the coefficient on SCPS is positive and significant (0.086, p < 0.10). Besides, the higher growth rate of operating revenue implies the strong competitiveness of products to some extent. Table 6 reports the robustness test results of the whole sample for model 1- model 3. In the state-owned sample, the coefficient on SHRCR is positive and significant (0.017, p < 0.01). Protect assets and safeguard against their theft. This maximum exists between LnASSET and LER, which is less than the threshold of 0.800. Therefore, the effective internal control can enhance the practical value of CSR activities. Achieve greater effectiveness and efficiency in business operations. Furthermore, in order to avoid the adverse impact of dimensional differences between the explained variable and explanatory variable on the results, in model 1model 3, the value of the explanatory variable (IC) is taken as 1, when the DIB index of an enterprise in this period is higher than that of last period, indicating that the effectiveness of the enterprises internal control tends to improve. While pursuing profits, large-scale enterprises should fully pay attention to the legitimate rights and interests of stakeholders, so as to gain a better consumer trust and social image. - External Auditors - Internal Auditors - Management - Audit . By engaging in this evaluation, an auditor can determine the extent of other tests that must be performed in order to arrive at an opinion regarding the fairness of the entity's financial statements. However, in state-owned enterprises, internal control has not yet shown a significant promoting effect on innovation performance. Model 1model 3 are also used to examine the possible intermediary effect of CSR activities in the process of internal control promoting innovation performance, which can be described by the diagram of intermediary effect (Fig 2). Enterprises should continuously improve the effectiveness of internal control, so as to promote the successful realization of their business objectives and strategic objectives. 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