Study On The Internal Governance Mechanisms And Disclosure Of Internal Control Information

Nowadays, to analyze the internal control information disclosure from theInternal governance mechanism angle so as to normalize the capital market and protectthe interests of investors through the form of laws and regulations, has become a newtrend in the field of academic research.First of all, the relevant literature and theories are reviewed. Subsequently, thispaper carries on the analysis of the status quo and existing problems of the internalcontrol information disclosure. The overall poor performance of internal controlinformation disclosure has not yet been changed fundamentally in our country, whichis mainly reflected in the problems like incomplete information disclosure and lack ofthe motivation for voluntary disclosure, etc.The author holds the opinion that the impact study of internal governancemechanisms on the inner control information disclosure lies in the selection of variablecharacteristics to measure the governance efficiency of the inner governance structurein each department. As there are so many influencing factors for company’s internalgovernance structure efficiency, it is impossible to cover all factors. As far as possibleto achieve the result of\"relatively satisfied\" is the target of this article, and facilitatequantitative analysis and empirical research, it is necessary to simplify dependentvariables while choosing the (variable) characteristics.Then, conduct empirical research on the basis of detailed analysis of theinfluential factors of internal governance mechanisms on the internal controlinformation disclosure, adopt the panel data of S.S.E A-share listed companies from2011-2012, the preliminary conclusions are as follows:(1)Study results indicate that a higher percentage of the state-owned shares meansserious absence of shareholders that forming the phenomenon of insider control. Theownership concentration and the internal control information disclosure level presentan inverted U-shaped relationship, which indicates too high or too low of ownershipconcentration is detrimental to the operation of supervision and restraint mechanism in the corporate internal governance structure.(2)The scale of the board is positivelyrelated to the internal control information disclosure but the correlativity is less evident.It illustrates that after the introduction of the independent director system, theindependency helps the internal governance effectiveness of the supervision andrestraint mechanism full play. Nevertheless, beyond my expectation, the relationshipbetween leadership structure and the level of internal control information disclosure isnot obvious. Maybe it is because the convergent leadership structure has noappreciable impact on the internal control information disclosure level.(3)The scale ofthe board of supervisors is positively correlated with the internal control informationdisclosure level, which indicates that the increase in the number of the board ofsupervisors contributes to more and more detailed internal control informationdisclosure by the management.(4)The proportion of managers’ shareholding and theinternal control information disclosure level show no correlativity. This probably bedue to no introduction of equity incentive mechanism in the most of companiescurrently. Hence, the role of incentive character in management level on the internalcontrol information disclosure cannot play effectively.Finally, according to the nonlinear relationship between ownership concentrationand the internal control information disclosure level, this paper set up a Thresholdregression model to investigate the threshold effect under the influence of ownershipconcentration.