Relations Between Internal Control Information Disclosure And Audit Pricing: Evidence From Listed Companies Of China Based On The New System

The enterprise internal control basic norms was put into effect on January lth,2010in china, followed by the issue of The supporting guidelines for enterprise internal control. Both of the two files are of great importance to consummate internal control evaluation system and improve internal control disclosure quality. In this context, we take Shanghai A-share listed company in2009and2010as an example, and study the relationship between internal control information disclosure and audit pricing taking use of three indexes:the disclosure of internal control self-evaluation report, internal control identification Report and internal control defects. We also design internal control self evaluation report disclosure index which suggest the disclosure degree of internal control information for the deep analysis according to the internal control evaluation guidelines. The empirical results show that there are no significant correlations between the audit pricing and three indexes, the correlation coefficients between disclosure index and audit pricing is numerically bigger, but not significant either. All of these indicate internal control information’s lack of substantial contents as well as non-standard disclosure. At the same time, we find that the listed company scale, whether the auditor is "big four", the audit opinion types and companies’ location are positively and significantly related with audit pricing, which are the main factors affecting the audit pricing. The proportion of accounts receivable and inventory in the total assets, the asset-liability ratio, quick ratio and the first majority shareholder’s ownership property do not reflect significant correlation with audit pricing. In view of above questions, Related suggestions have been put forward at the end of the paper.