1. Because this is the requirement of the regulatory authorities, each company needs to evaluate its internal control environment, and this evaluation also needs to be audited by auditors and finally disclosed as part of the annual report. If a company doesn't even have an internal control manual, it shows from one aspect that the company doesn't have a written internal control system, so it is difficult to evaluate the internal control environment of the company. So it does not meet the regulatory requirements.
2. Affect the company's financing ability. Bad internal control ring will make investors doubt corporate governance, control environment and compliance, thus affecting the company's financing ability. Because companies without a good internal control environment are more likely to have managers use their power to sacrifice shareholders' rights for their own private interests than companies with perfect internal control. Let's give a popular example. If you have 10 million in your hand, then look for the investment target. The business model, scale and profitability of Company A and Company B are similar. The difference is that the internal control system of Company A is perfect, and there are approval procedures and authority regulations for asset disposal and project investment. For major disposal and investment exceeding 40% of the company's income, major shareholders need to participate in the audit.