An Empirical Research On The Factors Related To Existence And Disclosure Of Internal Control Deficiencies In Listed Companies

An Empirical Research on the Factors Related to Existence andDisclosure of Internal Control Deficiencies in Listed CompaniesSince the Enron event exposure in the end of2001, American capital market isthe emergence of a round of fraud scandal, exposed the internal control of listedcompanies there is a serious problem. After the United States in2002issued" Sar-banes-Oxley Act", China’s two stock markets in2006released the guidelines for theinternal control of listed company. The internal control is an important factor to en-sure its reliability and vlidity of financial reports. how to establish an effective inter-nal control system for the managers of listed companies and the external regulatorsare important issues, and also the most urgent problem. The United States since2002"Sarbanes-Oxley Act" after promulgating, the internal control information disclosureof listed companies transfer from the voluntary disclosure stage to the mandatory dis-closure stage, scholars also began to research direction of internal control deficienciesand disclosure of information. And our country currently the empirical study on in-ternal control deficiencies and disclosure of the factors influencing is not much, so weshould strengthen the research, this is important both in the theory and practice of in-ternal control of the listed company of our country construction and supervision ofinternal control system. What does the factors affect of internal control deficienciesexist? What are the motives for management to discover and disclosure these factors?This is clear ly an empirical question.Therefore, this article chose2010Shenzhen’s main board listed company ofmanufacturing industry as the research object, to study the factors of internal controldeficiencies and the internal control deficiencies disclosure. We found that, compareto the absence of internal control deficiencies of listed company, existence of inter-nal control deficiencies of listed companies operating performance have bad sales growth rate is high, low rate of assets and liabilities; the company internal control de-ficiencies exist tend to be chairman and manager two-jobs-unit-one. While the hold-ing proportion of the members of the board of directors is higher, the higher qualityof the audit committee, the more is used for to promote the management to the con-struct the internal control. At the same time we also find, financial statement restate-ments, type of audit opinions and litigation risk is positively related to the internalcontrol deficiencies. Finally, in view of the above conclusions we put forward sugges-tions to strengthen the construction of internal control.