A Study between the Internal Control and Tax Risk -Based on the Listed Real Estate Enterprises in China -

In May 2009, the State Administration of Taxation issued the “Guidelines for the Management of tax risk of Large Enterprises”(2009) to help enterprises establish a tax risk management system. This is the first time that tax risk have been formally presented in a separate form, causing a stir in the academic and practical circles. Tax risk is one of the financial risks faced by enterprises. The consequences can not be underestimated. Improper handling or slight neglect may bring economic losses, reputation damage and even bankruptcy crisis. At present, the tax risk management of Chinese enterprises has just started. Many enterprises have inadequate internal control systems and limited ability to manage tax risk. Tax risk have become an important factor affecting business results and safeguarding corporate interests. The control and reduction of risks is crucial to the survival and development of enterprises. This paper cuts through the internal control of the enterprise, and selects 90 enterprises during 2013-2017 for the total of 450 samples in the A-share real estate industry listed in China's securities market as the research object. Combined with the theory of internal control and from the perspectives of operation, reporting and compliance with taxation the hypothesis is proposed and regression models are constructed. The empirical study is related to the correlation between the degree of implementation of internal control and corporate tax risk, and finds that The quality of the operation is positively correlated with the tax risk of the enterprise in the level of 10%. The quality of the report is negatively correlated with the tax risk of the enterprise in the level of 5%.The quality of compliance is negatively correlated with the tax risk of the enterprise in the level of 10%. Finally, the paper puts forward reasonable suggestions for the reduction and prevention of tax risk.The study results provide references for enterprises to make strategic plans and prevent risks.