Study On Influencing Factors Of Corporations’Internal Control Information Disclosure

Internal control disclosure plays an important role to the efficiency and effectiveness of the capital markets. From the prospective of asymmetric information problem and contract theory as the basis, this paper examines the influence factor of managers’ behavior:disclosing internal control self-evaluation and audit report voluntarily. Beside this, we also want to know if it is effective to transfer the information to the outside world.First, this article focuses on the disclosure of internal control self-evaluation. Based on the different disclosure requirements, we divide the period to two parts: entirely voluntary disclosure stage, including2006to2007; part of mandatory disclosure, including2008-2011of Shanghai Stock Exchange. We use the literature review to search the entirely voluntary stage. It shows that company size, business performance and financial audit opinion work on the disclosure decision. For the part of mandatory stage, we research from three aspects, internal control risk factors, external disclosure stress and disclosure motivation. The empirical result shows that internal control risk factors have more influential than the external stress for the disclosure decision.Second, we study for the auditor’s reports on the effectiveness of internal control. This content also divides to two parts:entirely voluntary disclosure stage, including2008-2010; part of mandatory disclosure, including year of2011. Unlike the previous, besides the internal control risk factors and external disclosure stress, here we also include certified public accountants" element to research the important factor which affect the internal control report disclosure decision. We find that during the entirely voluntary stage, internal control risk factors have more influence at Shenzhen stock exchange, including the board of supervisors, business performance and dealt with ST. But at Shanghai stock exchange, the external disclosure stress is more important, including institutional ownership, assets and liabilities rate, and the central holding. The reason for the difference, is the different disclosure requirement of management’s self-evaluation. The Shanghai stock exchange belongs to part of mandatory disclosure. However, the Shenzhen stock exchange is mandatory disclosure. Every company has to disclose the internal control self-evaluation. For the part of mandatory stage, because of the disclosing system transforming to mandatory disclosure, the significance of result is not so high. But the influence factors of the Shanghai and Shenzhen stock exchange is the same as entirely voluntary disclosure stage.This paper systematically researches the impact facts during the different disclosure requirement in development process of the internal control regime. According to the conclusion, we suggest that the regulatory authorities should consider the self-assessment and the third party evaluation with voluntary and mandatory disclosure mechanism together in the establishment of information disclosure system. This can give full play to the role of signal transmission of voluntary disclosure of information to reducing information asymmetry problem. It will be perfecting our capital market.