Media Attention,Firm Life Cycle And Internal Control Effectiveness

As an internal governance mechanism of the company,internal control plays an increasingly important role in the economic society.In 2005,the State Council required listed companies to establish a sound internal control system.In 2008,the"Basic Norms for Internal Control of Enterprises" was released.In August 2012,the Ministry of Finance and the China Securities Regulatory Commission jointly issued the "Notification on the Implementation of the Internal Control System in batches on Main Board Listed Companies in 2012",which fully reflects the country's high attention to internal control.The prerequisite for achieving the internal control objectives is the effective construction and implementation of internal control.This makes the relevant research on the effectiveness of internal control particularly important,especially the study of its influencing factors.In recent years,the attention of media to microcosmic corporate governance has become a research hotspot in the accounting field.The media is seen as an external corporate governance mechanism alongside the law.Its role in the capital market is becoming more and more pronounced.The China Securities Regulatory Commission has adopted a series of regulatory policies in order to regulate the operation of listed companies and especially stress that strengthen the role of the media.Is there a certain link between internal control and media which are regarded as internal and external governance mechanisms for corporate governance respectively?Or do the media considered to be an external governance mechanism play its role in improving the effectiveness of the company's internal controls?Are there significant differences in the media attention of listed companies in different life cycle stages?Does this difference affect the media's role in improving the effectiveness of the company's internal control?With regard to these questions,the current research cannot yet provide systematic answers and empirical evidence.However,the answers to these questions can help us to fully exert the corporate governance role of the media,improve the efficiency and effectiveness of corporate governance,and prevent or discover and timely correct financial fraud to some extent.In view of this,this thesis selects the experience data of A-share listed companies in Shenzhen and Shanghai from 2013 to 2015 and exploratively introduces the enterprise life cycle theory into media governance research to studying whether the company's life cycle will affect the media attention to the company,and on this basis,to further dynamically examine the impact of media attention on the effectiveness of the company's internal control.The research results of this thesis are as follows:(1)The media pays different attention to companies in different life cycle periods:they pay the highest attention to the companies in the growing period,followed by the mature period,and pay the least attention to the enterprises in the recession period.That is,the degree of media attention is from "growing period → mature period → recession period,which shows a gradually decreasing trend.(2)Media attention has different effects on the effectiveness of internal control of enterprises in different life cycle stages.For listed companies in the growing period,media attention can significantly improve the effectiveness of internal control.In the mature period,this positive effect of media attention on internal control still exists,but it is no longer significant.The degree of media attention is no longer a positive correlation with the effectiveness of the internal control of a company in recession.It is a negative correlation.This shows that media attention can improve the effectiveness of internal control of companies which is in growing period,but plays a negative role to the effectiveness internal control of enterprises which is in the recession period.This article consists of six parts:The first one is the introduction.This section first focuses on the background and research significance of this thesis.Secondly,the research objectives,contents and related methods are proposed.Finally,the technical roadmap of this thesis is designed and the research innovations of this thesis are expounded.The second part is a literature review.This part mainly focuses on the related research progress at home and abroad,and reviews the literature on the media attention,the life cycle of the enterprise and the effectiveness of internal control,and finally puts forward the research viewpoint of this thesis.The third part is related theories and assumptions.This part first introduces corporate life cycle theory,the principal-agent theory and information asymmetry theory,and then builds a theoretical framework for media attention that has differential effects on the effectiveness of internal control at different life cycle stages.Finally,put forward the research hypotheses of this thesis.The fourth part is the empirical research design.First of all,since 2012,China has mandated that China Main Board listed companies disclose internal control self-evaluation reports and internal control audit reports.This thesis selects the data of A-share listed companies in Shenzhen and Shanghai from 2013 to 2015 as the initial observation sample.Second,this thesis defines the relevant variables and designs the corresponding test model,including variable definition,model selection and sample selection.The fifth part is empirical analysis.Descriptive statistics is conducted first,followed by correlation coefficient analysis.Then this section analyzes whether the company's life cycle will affect the media attention to the company,and on this basis,to further dynamically examine the impact of media attention on the effectiveness of the company's internal control.In addition,a series of robustness tests were designed to validate the regression analysis results.The sixth part is research conclusion and suggestion.The main research conclusions of this thesis are drawn and relevant countermeasures and suggestions are proposed.Besides,the shortcomings of this research and the prospects for future research are expounded.The innovations of this thesis are as follows:(1)This article exploratoryly introduces the theory of enterprise life cycle into media governance research,trying to identify whether the corporate governance function that media attention is consistent in all life cycle stages,which to a certain extent provides new directions for media attention as a study of important external corporate governance mechanisms and helps deepen the understanding of media players in the capital market.(2)Make a special dynamic analysis by integrating the company's life cycle,media attention,and effectiveness of internal control into a unified framework.The current research on media attention or the effectiveness of internal control is mostly based on a static perspective.This article for the first time innovatively links the corporate life cycle with media attention and effectiveness of internal control,and discusses the dynamic impact of media attention on the effectiveness of internal control from the micro level(listed companies),and dynamically displays the links between informal and formal,external and internal corporate governance mechanisms.This article examines the issue more closely to the reality,so it is more targeted and realistic and can provide a basis for the use of external informal corporate governance mechanisms to improve the effectiveness of internal control.