Abstract: Taking 2394 local state-owned listed companies from 2009 to 2013 as the samples, this paper conducts an empirical study of the impact of government intervention on the effectiveness of internal control of local state-owned enterprises in different sections from the five dimensions of control objectives. The results show that during the course of realizing the different internal control objectives by local state-owned enterprises, the government intervention has different effects, i.e., the government intervention can significantly promote the realization of such objectives as corporate strategy, legal compliance and assets safety, while it is not helpful to the improvement of business performance and the quality of financial reports. Moreover, government intervention may in general weaken the effectiveness of internal control of the local state-owned enterprises.

Key words: government intervention; effectiveness of internal control; control objectives; local state-owned enterprises