Research On Influencing Factors Of Internal Control Defects Disclosure

In the 21 st century,which has witnessed rapid economic and social development,frequent financial scandals at home and abroad have made government departments and companies pay more attention to the construction of internal control systems.In 2008,the Ministry of Finance and other five ministries and commissions jointly issued the Basic Norms for Corporate Internal Control,and in 2010,the Guidelines for Internal Control of Enterprises were issued,which forced the listed companies to submit their internal control evaluation reports in batches and gradually to realize internal control information.The transition from voluntary disclosure to mandatory disclosure.This paper is based on the institutional background of domestic mandatory disclosure of internal control evaluation reports.The financial data and public information of the A-share listed companies on the Main Board that have been included in the disclosure are used as research samples to explore the influencing factors of disclosure of internal control defects.The article first reviews domestic and foreign scholars' progress on the disclosure of internal control defects and comments on related research.Then it defines the classification criteria for internal control defects and their identification methods.It also combines relevant theoretical foundations to improve the internal control defect disclosure model,and proposes relevant assumptions and carries them out.The article believes that internal control defects disclosure are affected by both the internal control defect opportunity,the internal control defect discovery probability and the internal control defect disclosure motivation or pressure.The grouping verification analysis is performed according to the internal control defect severity,and the following results are obtained:(1)In the aspect of internal control defects opportunities,the company scale indicators are selected for verification.The results show that the listed companies with larger companies have greater opportunities for internal control defects and greater probability of authenticity disclosure,and the empirical results are more significant.(2)The probability of detection of internal control defects was selected by merger and reorganization to verify.The results show that the merger and reorganization of listed companies has significantly increased the probability of management's disclosure of internal control defects.(3)In terms of the motivation or pressure for the disclosure of internal control defects,select the non-compliance indicators for verification.The results show that the listed companies are subject to irregularities and significantly increase the possibility of disclosure of internal control defects.(4)According to the different degree of internal control defects,the samples were divided into groups for empirical analysis.The results show that the company's scale,mergers and reorganizations and violations can significantly promote the disclosure of general defects in internal control,while the disclosure of major internal control defects is only relevant.There is a significant positive correlation between the pressures of external violations.Finally,based on the research conclusions,the paper proposes targeted recommendations,mainly from strengthening the effectiveness of market supervision,promoting the gradual improvement of the capital market;optimizing the corporate governance structure,and promoting the transparency of information disclosure;strengthening the supervision of the audit industry,and strive to narrow the “poor public expectations”.The promotion of enterprises to better carry out the construction of internal control systems and follow-up optimization.