Research On The Influencing Factors Of The Authenticity Of Disclosure Of Enterprise Internal Control Deficiencies

With the announcement of Guidelines for Enterprise Internal Control and other related systems,the government has continuously strengthened the requirements for the disclosure of internal control deficiencies.However,in the context of the system of continuous coercion,all kinds of domestic fraud incidents occur frequently,and the internal control self-assessment report of the enterprise in the internal control deficiencies of the fraud behavior is rarely mentioned.It can be seen that the disclosure of enterprise internal control deficiencies is not entirely true,which shows that the government system construction is still loopholes,nor is it beneficial to investors' economic decision-making,and may lead to reputation damage due to mismanagement or false disclosure.Therefore,it is very important to explore the factors that affect the authenticity.However,the current domestic research on the internal control deficiencies,mostly based on the assumption that the information disclosed by enterprises is completely true,from the perspective of the authenticity less.Therefore,based on the realistic background and the theoretical background,this article from the perspective of authenticity,analysis the status quo of the authenticity of the current disclosure of domestic internal control deficiencies and explore the factors that may affect the authenticity,in order to seek ways to help the government improve the system construction,to help investors improve the ability to identify information and to help enterprises strengthen internal control construction.This paper first reviews the domestic and foreign literature on the disclosure of internal control deficiencies.Then,we define the authenticity and related concepts of the internal control deficiencies disclosure,and expounds the theoretical basis of this paper,including the upper echelon theory,asymmetric information theory,principal-agent theory and managerial power theory.Then,we analyze the authenticity of the internal control deficiencies in the background of compulsory information disclosure,and point out that there are three major problems: there are few enterprises with real disclosure deficiencies,the identification of the severity of the deficiencies is not accurate and the poor availability of defective content;then according to the occurrence of financial restatements and violations of the incident from 2014 to 2015 in the A shares on the Shanghai and Shenzhen stock exchanges to determine the pre-existence of internal control deficiencies in the enterprise,and as a sample,through descriptive statistics,correlation analysis,Logit regression analysis and robustness check,and analyzes the factors that affect the authenticity of enterprise internal control deficiencies.The results of the analysis are as follows: The factors that affect the authenticity are mainly in the four aspects of enterprise characteristics,management ability,corporate governance and external audit.In the presence of deficiencies,felling into financial distress,the members of the audit committee are of higher professional level,the possibility of finding deficiencies is higher,the internal control deficiencies reveal the authenticity of higher.In addition,those enterprise with higher proportion of institutional investors with shareholding,with higher proportion of independent directors,with higher growth rate of audit fees,and with the issuance of non-standard audit opinions by financial reports are more likely to disclose deficiencies and disclosure of internal control deficiencies are more real in the presence and detection of deficiencies.Finally,combining with the current situation and the research results,we put forward some suggestions on improving internal control and defect disclosure system,strengthening the disclosure mechanism of internal control deficiencies and improving the ability of investors to identify internal control defect information.