Study On Internal Control Information Disclosure Of Listed Company

There is a series of vicious accounting information frauds come into light since 2001, such as Enron and WorldCom, which make the investors have no confidence in the listed companies'authenticity and sufficiency of internal control information disclosure (hereinafter referred to as ICID) and also caused serious damages to the information of investors and efficiency of capital market. In order to solve this problem, the U.S. Congress adopted and promulgated the"Sarbanes-Oxley Act"in 2002, which formally put forward the mandatory requirements of listed companies to disclose their internal control report. At the same time, an increasing number of countries and regions are required to mandatorily disclose the internal control information. China also requires more about ICID, therefore the study on corporate internal control system theory and how to establish perfect and effective internal control information disclosure system has great significance.This paper applies property rights theory, contract theory, efficient capital market theory and signal transfer theory to discuss the importance of internal control information disclosure and the significance of mandatory and voluntary disclosure, and also illustrates that internal control is the implementation mechanism of corporate contract, internal control information disclosure is a protection of property rights of Stakeholder outside the company. Meanwhile, internal control information disclosure is one of the effective institutions which can ease the conflict between principal and agent and make the management lift the fiduciary responsibilities. This paper uses internal control theory and decision-making useful to describe the objectives, quality characteristics and principles of internal control information disclosure. This paper puts forward the theory framework of internal control information disclosure which contains objectives and body, quality characteristics, principles, foundation, content and evaluation criteria of internal control information disclosure.This paper puts emphasis on the research of quality evaluation system of ICID. It begins with the current situation of ICID in china and analyze the limitations existed in ICID discipline, and then we propose the content of the ICID in china, at the same time we establish the ICID quality valuation system as well as the quality evaluation standard. We use the Analytic Hierarchy Process (AHP) to design the internal control information disclosure index (hereinafter referred to as ICIDI) which is a index can be used to measure the quality of ICID. This index can be divided into three hierarchies, among which the first-grade indexes are timeliness, authenticity and completeness. The authenticity contains four second-grade indexes, the completeness contains five second-grade indexes and 29 third-grade indexes. We have established different quality evaluation systems for different grades indexes and combined subjective weighting (experts'weight method) and objective weighting (entropy weight method) together to establish this index which is an evaluation system of ICID that suits china's basic conditions. Besides, we also calculate and assess the quality of ICID as well as the timeliness, authenticity and completeness for all the 825 listed companies of A share in stock market of Shanghai in 2007.Based on positive method and ICIDI we have constructed, we first examine the relation between ICIDI and corporate performance, using the sample of 552 listed companies of A share in stock market of Shanghai in China 2007. The results show that there is positive correlation between ICIDI and corporate performance as well as firm value, as the same time, the timeliness, authenticity and completeness of ICID are all positive correlated with corporate performance as well as firm value. Then we take empirical study on the influence factor of ICID, using the sample of 707 listed companies of A share in stock market of Shanghai in China 2007. The research finds that the influence factors of ICID including firm size, profitability, growth, listed time, majority stockholder is state, industry, among which profitability influences the ICID the most, the following factors are listed time, growth, firm size, industry, majority stockholder is state. In the end, we propose the policy suggestions on improve the ICID discipline based on the theory analysis and positive research results.