The Study On The Influence Of China’s Listed Companies Internal Control Disclosure To The Cost Of Equity Capital

In recent years, China’s listed companies have occurred many financial scandals, theseevents all reflect the weakness of internal control. Therefore, in order to regulate theinformation disclosure of listed company internal control, the relevant departments havepromulgated a series of laws and regulations. In2006, the Shanghai Stock Exchange and theShenzhen Stock Exchange has promulgated the internal control guidelines of listedcompanies; in2010, the Ministry of Finance and other five ministries jointly issued theguidelines of enterprise internal control, together with the basic norms of internal control(2008), China’s enterprise internal control standard system has constructed. With theregulations, make it clear whether the internal control information disclosure can be more real,and reduce the information asymmetry, and whether the stock price can reflect the value ofthe enterprise more accurately, improve the efficiency of capital market allocation ofresources, and ultimately reduce the cost of equity capital is of practical significance.This paper uses the method of multiple linear regression to analyze the relationshipbetween the internal control information disclosure quality and cost of equity capital. First ofall, based on the internal control information disclosure requirements of the relevant laws andregulations, combined with the listed company annual report, internal control self-assessmentreport and audit report disclosure, establish internal control information disclosure qualityevaluation system, and use A shares544listed company to evaluate the internal controlinformation quality，and the evaluation results show: although more and more listed companydisclose their internal control self-assessment reports, but few listed company discloseinternal control self-assessment audit reports, besides, most of the listed company don’tdisclose the internal control defect; then, use PEG model to estimate the cost of equity capitaland select the appropriate control variables，then build multiple linear regression model;Thirdly, test the relationship between the internal control information disclosure quality andcost of equity capital, and the empirical results show that: the quality of information disclosure did not affect the cost of equity capital of the listed company internal control. TheBerta coefficient, firm size, ownership concentration, operational efficiency are positivelyrelated to the cost of equity capital, stock liquidity are negatively correlated to the cost ofequity capital, while the proportion of independent directors and the cost of equity capital isnot related to the cost of equity capital. Finally, according to the empirical results, put forwardthe corresponding policy recommendations.