Research On The Relationship Between Management Power,Product Market Competition And Internal Control Defect Identification Standard Disclosure

With the promotion and implementation of the internal control standard system of listed companies in China in 2012,the "internal control defect identification standard" emerged as the first characteristic internal control concept under China's national conditions.The internal control defect identification standard refers to the basis and standard for the division of the internal control defects determined by the company or organization in the internal control evaluation process of the enterprise,and the internal control defect identification standard disclosure is announced by the enterprise on the enterprise internal control self-evaluation report.In recent years,the promulgation of a series of documents such as the domestic control information disclosure system and regulations has stipulated the disclosure standards for internal control defects.However,in the context of such enforcement,the investigation of the disclosure status of the internal control defect identification standards of listed companies(Analysis Report on the Internal Control System of China's Listed Companies(2012-2017))pointed out that "the internal control defect identification standard disclosure is not detailed enough.Most of the listed companies' internal control defect identification standards are only directly quoted from the Guidelines for Internal Control Evaluation of Enterprises and the Corporate Information Disclosure and Registration Rules No.21 of the Public Offering of Securities.The establishment of internal control defect identification standards in line with the company's own characteristics has led to the lack of understanding of the internal control defects and the risk of listed companies,which is not conducive to the internal control evaluation results." It can be seen that the Ministry of Finance and other relevant departments are not satisfied with the internal control defects of listed companies in China.Standards are in the form of disclosure status,and frequent outbreaks of corporate bankruptcy cases due to internal control defects are no longer a few,and indirectly indicate that the internal control defect identification standards disclosed by enterprises have not played the role of identifying internal control defects.Undoubtedly,the internal control defect identification standard is the authenticity of the internal control defects and the main basis for its audit.At present,the disclosure status of internal control defect identification standards of listed companies in China is not satisfactory,so what factors can affect the disclosure of internal control defect identification standards becomes a problem that needs to be investigated and considered.In the context of China's mandatory requirement for listed companies to disclose internal control defect identification standards,there are deficiencies in the disclosure of internal control defect identification standards of listed companies.How to evaluate the disclosure level of an internal control defect identification standard? Internal governance environment,such as management's disclosure of internal control defect identification standards,will it adopt selective disclosure behavior because of excessive power? Can an external regulatory environment,such as product market competition,affect the disclosure of internal control defect identification standards? What measures can be used to improve the disclosure level of the internal control defect identification standards of listed companies? These are all things that this thesis needs to study.Based on the internal control defect identification standards disclosed by the Shanghai and Shenzhen A-share main board listed companies,this thesis analyzes the status quo of the internal control defect identification standards disclosure in China by using the content analysis method,and summarizes the key aspects of the current internal control defect identification standards.The internal control defect identification standard discloses the existing problems,and the disclosure evaluation system quantifies the internal control defect identification standard disclosure.At the same time,this thesis analyzes the relevant theoretical literature,based on the information asymmetry theory to illustrate the current management can monopolize the internal control defect identification standard disclosure information,based on the principal-agent theory to analyze the reasons for the management to obtain power,based on the management power theory to explain the management has an opportunistic motive for abusing power in the disclosure of internal control defect identification standards and further defines and divides the powers of structural power,ownership power,expert power,and prestige power in different dimensions,and discusses products based on information theory of product market competition.The degree of competition between industries in the market competition and the degree of competition within the industry regulate the disclosure of different management power dimensions and internal control defects.Based on the establishment of this theoretical analysis and hypothesis,this thesis selects the A-share main board listed companies in Shanghai and Shenzhen stock exchanges from 2012 to 2017 as the research object,empirically analyzes the degree of competition and the internal control defects of management level power and product market competition.The relationship between standard disclosures yields the following findings:(1)Management's structural power,ownership power,expert power and prestige power all have negative influence on the disclosure of internal control defect identification standard,and ownership power has the strongest negative influence on the disclosure of internal control defect identification standard,followed by structural power,expert power and prestige power.(2)There is a positive correlation between the degree of competition between industries and the degree of competition within the industry and the disclosure of standards for internal control defects.(3)The higher the degree of competition between industries,the more it can inhibit the influence of expert power and prestige power on the disclosure of internal control defect identification standards;the higher the degree of competition within the industry,the more it can inhibit the influence of structural power and ownership power on the disclosure of internal control defect identification standards.In addition,the degree of competition between industries has no significant regulatory effect on the disclosure of structural power,ownership power and internal control defects.The degree of competition in the industry has no significant adjustment effect on the disclosure of expert power,prestige power and internal control defects.Therefore,this thesis proposes to improve the internal governance mechanism of the enterprise and rationally control the management power from the perspective of the enterprise.From the perspective of the government,it proposes to strengthen and improve the disclosure system of the internal control defect identification standard,increase the disclosure of violations,and introduce appropriate product market competition mechanism.It is recommended that the management's power be optimized and rationally integrated in combination with the internal and external governance mechanisms of the enterprise,and a strong constraint environment will be formed to supervise the management's private interest behavior and standardize the disclosure of internal control defect identification standards.