A Study On Internal Control Quality,Ownership Concentration,and Audit Report Lag

In the stock market,the disclosure of the accounting information in the annual report of Listed Companies is an important information source,which used to make effective decisions.It reflects the operating conditions and operating results of Listed Companies in a complete accounting year.The timeliness of the annual reports disclosed by the listed companies will directly affect the quality of information disclosure of listed companies,and is one of the important factors affecting the effectiveness of stakeholder decisionmaking.In addition,the audit report is an important part of the annual report.Audit report lag is an important factor restricting the timeliness of annual report.Therefore,the research on the timeliness of annual report has attracted more and more attention from both theoretical and practical circles.Audit report lag is the main measurement index of audit report timeliness.And the index can quantify the audit efficiency and audit report timeliness,and then measure the timeliness of the annual report.In general,the audit report lag is small,the annual report disclosure of financial information more timely disclosure of financial accounting information value is higher;the audit report lag is longer,the annual report disclosure of financial information is more delayed,and the values of financial accounting information is lower.Usually,if the disclosure of important financial information is not quickly enough,it may lead to stakeholders to take alternative way to access information,which is contrary to the principle of cost and benefit.That is to say,the value of the financial information disclosed by the company's annual report is weakened to some extent,and it also weakens the value of the audit.Therefore,the timely disclosure of the company's annual financial report is a necessary condition to improve the usefulness of the annual report of the financial information,and to want to increase the annual financial report for the timeliness of audit report disclosure timeliness,in-depth study is indispensable.Since the "basic standards" and the enterprise internal control supporting guidelines promulgated in 2008,China's internal control standard rose to a new height.High quality internal control plays an important role in improving audit efficiency,restraining the delay of audit report and improving the timeliness of audit report.Therefore,the research on the impact of internal control quality on audit report lag is of great significance to promote the timely disclosure of enterprise annual report.The separation of ownership and management leads to asymmetric information between shareholders and management and external investors.Improving corporate governance structure is one of the important measures to solve the negative impact of asymmetric information.The ownership concentration is an important manifestation of the ownership structure.In-depth study of the influence of the ownership concentration on the timeliness of audit report will let us make further understanding of ownership structure on the timeliness of annual report.Therefore,it is of great significance to study the relationship between the ownership concentration and audit report lag of listed companies to improve the timeliness of enterprise annual report disclosure.This article use multiple regression model to test the internal quality control,ownership concentration and the related audit report lag three,throughout the standard research and the empirical test.We have drawn the following conclusions:(1)the quality of internal control is negatively related with audit report lag.The high quality internal control system can restrain the audit report lag;(2)the ownership concentration is negatively related with audit report lag too.The higher degrees of ownership concentration of listed companies have,the shorter the audit report lag is.It means listed companies are often more willing to timely disclosure of annual financial reports;(3)the substitution exists in the internal control quality and ownership concentration degree when they make effect to the audit report lag together.The lower the ownership concentration is,the quality of internal control plays a more significant role in the suppression of the audit report.In another word,the quality of internal control creates a good environment for the inhibition of audit report lag.The conclusions of this paper have a certain reference to improve the company's annual financial report timeliness.According to the empirical results,how to coordinate the relationship between the quality of internal control,ownership concentration and audit report lag?In my opinion,I put forward the following suggestions to reduce the audit report lag:(1)to strengthen the construction of enterprise internal control;(2)to maintain a reasonable high-level of ownership concentration;(3)to improve accounting standards,auditing standard and related laws and regulations.