Characteristics Of Top Management Team Impact On Internal Control Information Disclosure Quality’s Research

Abstract:With the exposure of financial fraud cases in some listed companies, there is an increasing awareness of the fact that the decision-making process is biased only based on the financial information provided by those companies. Although the disclosure of its internal control information can deliver a positive signal to the public, still it can not save the the situation of asymmetric information. The year of2008has witnessed a release of Basic Norms of Internal Control by the Ministry of Finance and other four departments, and year of\2010also released the Internal Control Guidelines.These laws and regulations provide the direction for a better establishment and further improvement of the internal control information disclosure of listed companies in China, which means a shift of information disclosure from the voluntary stage to compulsory stage.Top management team plays an important role in the enterprise management, whose personality characteristics, the characteristics of the profession and other factors affect the application of the company’s internal control that can not be ignored. Based on the theory of upper echelon and the fruitful results achieved, the thesis makes attempts to tests the impacts of the characteristics of the top management team on the disclosure quality of internal control information. Shanghai and Shenzhen A-share listed companies in2011and2012as the research sample, the thesis makes a multiple regression analysis based on the data of listed companies in China’s stock market. In order to achieve this goal, relevant demographic characteristics are selected as the main proxy variables of the top management team characteristics as well as entropy weight method and TOPSIS method are used to measure the company’s disclosure quality of internal control information.Consequently, the conclusion will be drawn as follows:(1) the sacle of top management team, the top managers’educational levels, as well as the top manager’s salary and the proportion of shares held of the top management team play a significant positive role on the disclosure quality of internal control information;(2) A significant negative correlation is existed between the serving time of the top management team and the disclosure quality of internal control information;(3) The impact of gender and age of the top management team on the disclosure quality of internal control information is not significant.The last but not the least, based on the conclusion above, the thesis attempts to provide some useful suggestions, so as to strengthen the construction of the top management team, enhance the awareness of the company’s internal control, regulate the internal control information disclosure behavior, as well as to improve external regulatory system.