| Enron Scandal rocked the whole world in2001, soon after this, scandals swept across theworld famous companies, such as World Com, World Communication Company, Xerox, MerrillLynchare. Deceptive behaviors in accountancy become increasingly intense, masses ofinvestors suffered heavy losses because of it. It seriously disturt and influences the normalorder in USA Capital Market, and also spread to International capital market. At the same time,scandals such as “Qiong Minyuan”, Zheng Baiwen, Ying Guangxia, CAO, SichuanChangHong brought to light. It shows that internal control system in our country is a empty shell,domineer over the internal control system are common. Desperate diseases must have desperateremedies, Comments on Sarbanes-Oxley Act issued by The State of USA in2002. On June28th,2008, the Ministry of Finance Securities and Futures Commission, the AuditCommission, China Banking Regulatory Commission, China Insurance RegulatoryCommission jointly issued the “basic norms of internal control”(referred to as the “newnorm”), it’s asked to implement within the scope of listed companies from July2009, andencourage other non-listed medium-sized enterprises to implement.Experienced seven years of development and growth，the company listed in SMESBoard has become a major force in the development of economic. Compared with the thecompany listed in the main board, most of the company listed in SMES Board are familybusiness, existence of related party transactions, blind pursuit of a diversification.Thesefactors largely appear to increase the company’s risk of internal control deficiencies.Withconcern the domain, the stage of development and legal environment for the particularity, theinternal control of the company listed in SMES Board become a "disaster area’’ in recentyears.Targeted on the company listed in SMES Board, the study on the influence factors ofinternal control deficiencies seems particularly urgent and important.First, this article introducs the domestic and foreign research and research results indetail. Then this article introduces the process of the system of internal control informationdisclosure.From the principal-agent theory, asymmetric information theory and signalingtheory, the author try to explain the need of disclosure of internal control deficiencies,andpoint out the difficulties in the indentify of internal control deficiencies under the presentsystem and theory. Through the internal control self-assessment reports of the companylisted in SMES Board, the author try to find out the problems in the disclosed of internalcontrol deficiencies,and analyze the reasons. Based on the the previous theory, through thelogistic regression model, this paper does a reseach on Influence factors of internal controldeficiencies. The study shows that financial status, the complexity of operations, speciallytreated and having got non-standard audit opinions are positively correlated with internalcontrol deficiencies, the company scale and the percentage of independent director in theaudit commission are negatively correlated, while the latter contributes little to internalcontrol deficiencies. It means that corporate governance mechanism, as a mechanism restraining internal control deficiencies, needs to be further improved.Based on findings, this paper makes the following recommendations：1,internal pressure:(1)the establishment of a reasonable share structure;(2) focusing onthe prevention of financial risks;(3) to prevent the blind pursuit of diversification andexpansion;(4)to enhance the independence of independent directors;(5) proactive reportingand Correcting Internal control deficiencies;2, external pressure:(1)Severely punish those who violate the law and discipline;(2)severe punishment to the external audit institution;(3)detailing the standards of internalcontrol deficiencies disclosure;(4) taking powerful measures to increase effective supplywhile curbing excessive demand, and further improve and standardize the related regulations. |
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