Research On Correlation Of Internal Control Information And Corporate Value

Since the enactment of the U.S. Sarbanes-Oxley Act,the internal control has become a hot issue of academic concern.The Ministry of Finance and other four ministries issued 《The Basic Norms of Inter Control》 in June2008.Later,《Internal Control Supporting Guidelines》 was issued by The Ministry of Finance and other four ministries in april2010, requiring listed companies disclosing their assessments based on their internal control systems,and the audit reports on their assessments as well.These regulations have bring up a much higher request for the internal control systems of chinese listed companies.However,due to the fact that the establishment of a comprehensive healthy internal control systems requires a mass input of resources,most chinese listed companies mandatorily set up and perfect their internal control systems,lack of initiative. Therefore,this paper tries to do some research to find out the relations between the internal control information and the corporate value, aiming at providing new ideas on how to build internal control evaluation system of our listed companies and how to improve our corporate’s internal control.The first chapter of this paper explains the research background and purpose,introduces the significance of selecting the topic、the research in these few years and the research methods.Then describes the major contributions and shortcomings of this paper.The second part of this paper reviews the main progress and achievements in domestic and foreign countries on correlation of internal control information and corporate value.The Chapter three is a detail summary of the development of the internal control information disclosing systems at home and abroad. Then the theory of correlation of internal control information and corporate value are introduced briefly, which provides a theoretical basis for the further analysis below. Then in chapter four,the internal control information disclosed in the internal control self-assessment report is divided into three categories,ten specific internal control information variables.This paper selects483list companies belonging to the manufacturing sector in Shanghai Stock Exchange of2010as investigative samples.Then this paper has done a certificate research on correlation of the internal control information and the corporate value.The research concentrates on the relationship between specific internal control information variables and the corporate value which was measured by Tobin Q and NCFROA.The chapter five is the major research findings and policy recommendations.This section summarizes the main conclusions of the study, put forward the policy recommendations such as improving the relevant laws and regulations in order to promote the internal control system of listed companies gradually.The major contribution of this paper include:(1) Using empirical research method,this paper proves that the disclosure of internal control information gives a positive signal to the market,and can significantly improve the corporate value, enabling the corporate management to realize the importance of establishing a sound internal control system within the enterprise;(2) The findings of this article can also be a theoretical reference for the regulatory authorities to establish relevant laws and regulations.The limitation of this paper is China is still lack of authority or index system to evaluate the disclosure of internal control information,so this research can not be a comprehensive evaluation on the disclosure of internal control information.Internal control information collecting and ten internal control information variables assignment is based on whether or not be disclosed,and disclosed in detail or not did not take into account in this paper. For a specific internal control information variables, the disclosure of the detail level is not take into account. Overcome these limitations is the author’s direction of further research efforts.