Abstract:Using the data of Chinese A share listed companies from 2008 to 2017 as samples, this paper empirically tests the influence of Confucian Culture on internal control based on the contemporary value of Confucian Culture “Ren, Yi, Li, Zhi, Xin”. The empirical results show that the contemporary value of Confucian Culture and internal control are significantly and positively correlated. This positive effect is significant in family firms, yet with no significant effect in foreign firms, and the contemporary value of Confucian Culture improves the quality of internal control by impacting the two paths of promotion incentives and corporate reputation. In addition, in regions that are less open, with a lower level of rule of law, and slower marketization process, or in companies with business crises, the contemporary value of Confucian Culture has a more significant effect on internal control. In terms of economic consequences, the contemporary value of Confucian Culture can enhance the inhibitory effect of internal control on agency cost and weaken the negative impact of internal control on corporate risk taking.