Disclosure Of Major Deficiencies In Major Shareholder Control, Media Supervision And Internal Control

In recent years,with the increasingly active socialist market economy,the production and operation activities of enterprises have become increasingly complex and diversified.As an important internal governance mechanism of modern enterprises,the importance of internal control in the production and operation activities of enterprises has become increasingly prominent.The effectiveness of the company's internal governance structure and administrative supervision,whether the relevant internal audits conducted by external audit institutions are true and effective,and whether the media supervision is timely and fair are all important to the company's production and operation and the healthy development of the capital market.Since July 2018,some major financial websites have issued documents questioning the authenticity of Kangmei Pharmaceutical's monetary funds,inventory,and financial costs.On December 28,Kangmei Pharmaceutical received the China Securities Association for the company 's alleged disclosure of information.On April 30,2019,Kangmei Pharmaceutical made a financial restatement of the 2017 annual report,and then a financial restatement of the 2016 annual report.These actions of Kangmei Pharmaceutical not only indicate that there are major defects in its internal control,but also that its disclosure mechanism for major defects in internal control is not sound.Prior to this incident,both the internal control reports issued by the company and the internal control audit reports disclosed by external auditors showed that it was a trusted "White Horse Stock." However,following the media's follow-up reports and the filing investigation of the CSRC,Kangmei Pharmaceutical's internal supervision and external audit supervision did not play its due role,or even can't work.This article based on internal control,equity structure theories and uses case study to study the causes of major internal control flaws,the path and effects of media supervision under the control of major shareholders of Kangmei Pharmaceutical.The study found that when a listed company is "one-dominated," major shareholders can make internal supervision "absent" by interfering with the selection and remuneration of internal supervisory bodies such as the board of directors and supervisors.At the same time,it also affects the external auditor independence and the failure of internal and external supervision prevent major internal control deficiencies in the enterprise from being identified and disclosed in a timely manner.Research suggests that listed companies should establish a governance mechanism to check and balance equity,introduce media executives as independent directors and members of the supervisory board,and establish a �whistleblower� protection and reward mechanism for the media industry to create more favorable conditions for media supervision to fully play its governance role.The research in this article can theoretically enrich the relevant literature on media supervision,at the same time can provides a certain reference for the full play of administrative supervision and media supervision mechanism in practice.