| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 96 === Societe Generale is one of the large-scale investment banks which occurs a heavy fraudulence at the beginning of 2008. Because of material weakness in internal control, Societe Generale has a €4.82 billion loss of misappropriation of asset. As a result, the effectiveness of internal control became a popular issue in the business field. In Taiwan, there are also some frauds like the Chinese Bank and Cosmos Bank. These cases perennially appear value of internal control, and internal control has been one important part of the corporate government. The research will analyze features of internal control in domestic banks and characters of fraud and examine the relationship among financial performance of banks and internal control effectiveness.
First, we use five elements and twenty principles of Internal Control over Financial Reporting — Guidance for Smaller Public Companies to analyze banks of material weakness in internal control which have characteristic and feather. In order to understand what if relationship between financial performance of banks and internal control effectiveness. We class banks as two kinds of normal and abnormal and use variables of Central bank CAMELS Rating System to perform logistic regression module to examine correlation between material weakness in internal control and the quality of financial performance.
Based on the study, most banks involved in fraudulent activities are suffered from misappropriation of assets. The main reason is improper design of internal control、element of control activities and supervision are inactive especially；The weakness of fraud is that element of internal environment and risk assessment have not affected. We select four domestic banks as samples to find out what elements lead to material weakness in internal control system and give some recommends to improve. Through logistic regression module, we find out that there is a positive correlation between failed internal control and the quality of financial performance. Under Central bank CAMELS Rating System, the abnormal banks usually have poor assets quality、failing profitability、net loss、mouldering performance and blue-sky financial structure. Normal banks have not this phenomenon.
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