The Study On The Effectiveness And Influencing Factors Of Internal Control Information Disclosure

Since January 1st,2012, Chinese domestic listed companies have entered all-sided implementation of the "Enterprise Internal Control Supporting Guidelines". This regulation makes systematic and comprehensive provisions on how to build and evaluate internal control system, and how to audit companies’ internal control self-evaluate report. Therefore, it is bound to bring a certain effect on the standardization of corporate governance and the effectiveness of the capital market. To figure out what the effect is, this paper conducts an empirical study. Listed companies with internal control weakness from Shenzhen A-share market between 2010 and 2012 are the study samples. By analyzing the empirical data with a logistic model, this paper tried to find out whether the effectiveness of internal control weakness information disclosure ("internal control weakness information disclosure" is shorted as "ICWD") had significantly improved after the regulation came into effect, and what the relevant factors of ICWD.Firstly, this paper compared and analyzed the overall situation of the ICWD, and found that "Enterprise Internal Control Supporting Guidelines "did have some positive effects, but not obvious. Secondly, through grouping the factors into three categories, namely company features corporate governance and external audit, this paper figured out the clear relations between these factors and ICWD with a binary logistic regression model. The study conclusions are as follows, companies of bigger size, whose board of supervisors hold more meetings, ones having experienced mergers and reorganizations are more willing to disclose their internal control weakness; the standard degree of audit opinion and the listed years have positive effects. While companies’ growth rate, the proportion of the shares held by the executives are negatively related to ICWD; other factors such as the size of the accounting firm, the size of audit committee and the quality of the companies’ financial results, etc. are not significantly related.The last part of this paper firstly put forward several suggestions with regard to three categories of factors influencing ICWD from two aspects, internal supervision and external supervision; then described the research limitations, and raised several research prospects.