The Research Of Internal Control Information Disclosure And Governance Effect

In2006,2007,2009, China has successively implemented internal control guidelines ofShanghai Stock Exchange, Shenzhen Stock Exchange and Basic norms of internal control; thedegree of internal control information disclosure has gradual improvement in recent years.However, in consider of protecting their trade secrets, disclosure of costs and the disclosure offalse information may likely to be punished, the internal control information disclosure in thelisted companies is very perfunctory in the past years. Internal control information reflects thedesign and implementation of internal control systems, and provides protection for theauthenticity of the financial statements, has information value. Internal control informationdisclosure works as a mechanism which is able to protect the interests of equity and creditorscan contribute to the company’s goals, then the degree of internal information disclosurewould be affected.This paper is based on corporate governance theory, internal control theory, agencytheory, asymmetric information theory, signaling theory, summarize the factors whichinfluence internal control disclosure, research the external reacts of internal informationdisclosure, select agency costs and interest payments as a result of multiple variables,representing the interests of equity and creditor protection, uses the mean comparison, themultiple regression method to research the internal information disclosure’s influence toprotecting the interests of equity and creditors, and the resulting Corporate governanceeffects. Between the state-owned holding companies and non-state-owned holding companies,this effect is different.The results show that: the more the internal control information disclosure, the morereduce the agent costs caused by conflict between managers and shareholders, and betweenbig shareholders and small shareholders, as well as integrated agency costs. And, in thestate-owned companies, state-controlled and internal control information disclosure generatedcross-multiplication effect, internal control information disclosure is more conducive toreducing information asymmetry, play the role of incentives and constraints, thereby reducingagency costs. Second: the more the internal control information disclosure, the more is able to protect the interests of creditors. Information disclosure of internal control has certaingovernance effect.So, whether it is from compliance with relevant laws and regulations, or for thecompany’s own interests, the company should improve the implementation of their internalcontrols and internal control information disclosure, the internal control informationdisclosure should have substance, and such information can help those who use it to makereasonable decisions. Regulatory authorities should also introduce appropriate laws andregulations, standardize information disclosure of internal control standards, in accordancewith the level of information disclosure of listed companies to implement classificationregulation, encourage listed companies to disclose detailed factual information.