Research On The Extent Of Internal Control Information Disclosure From The Managerial Power Approach

On August14，2012，the ministry of finance and CSRC(China Securities RegulatoryCommission) jointly issued the notice about2012main board listed companies classifiedpartial implementation of the system of internal control （Cai Ban [2012] no.30)；Thisnotice makes new rules to the main board listed company on internal control informationdisclosure, also reflects the internal control standard system construction work hard；Frommanagement point of view, the author thinks that the management power has a significantimpact on the internal control information disclosure and the implementation of theinternal control system.First of all, this paper reviews and comments the theory of management power andthe internal control information disclosure at home and abroad research literature. In anenterprise,whose corporate governance mechanism and the internal control system areweak, the managements, in their own interests tend to disclose the information helpful totheir interests and the enterprise, ignore the negative information；even within the scope ofthe rules and regulations，adjust and control enterprise’s information, in order to safeguardtheir own interests from loss and maximize their own interests.Secondly, on the basis of summary of existing research results, based on theprincipal-agent theory, signaling theory and game analysis between management andshareholders, depicting the impact of management power on the internal controlinformation disclosure. Theoretical analysis shows that: the management power is one ofthe important factors in determining how the internal control information disclosure, STcompanies tend to disclose less internal control information, On the contrary the non STcompanies tend to disclose more internal control information, in order to make the externalusers differentiate between different companies.Thirdly, paper selects59ST companies in Shanghai A shares2012annual as researchsamples,59non ST companies as reference sample；according to the information data released by companies, quantitatively describe the listed company’s management powerand the degree of internal control information disclosure, and then combining the proposedhypothesis, using the multivariate linear regression method to empirically the impact oninternal control information disclosure of management power.The results showed that themanagement power and the degree of internal control information disclosure significantlynegatively correlated. The greater the management power, but the lower level internalcontrol information disclosure; compared to the ST listed companies, the managementpower of non-ST to influence the company’s internal control information disclosure degreeof more pronounced.Finally, on the basis of the above theoretical analysis and empirical test, this papercomes to the conclusions；and then combining with the problems existing in the internalcontrol information disclosure of listed companies, in view of the company itself and theexternal regulators, puts forward policy recommendations: the company should furtherimprove the corporate governance mechanism, in order to balance the management power,to reduce the restriction of information disclosure; Regulators should develop as soon aspossible the unity of the internal control information disclosure evaluation mechanism, toevaluate the disclosure, and strengthen internal control information disclosure regulation;At last,on the basis of analysis of the limitations of this paper, we propose future researchdirections.