Research On Information Disclosure In Internal Control Of China Listed Banks

From Barings bank collapsed, to the financial crisis in 2008, the risk in financial area continuously appears, which gives our country's bank a wake-up call. Internal control information disclosure become the core of public listed bank information disclosure, and it highlights the importance of preventing financial risks as the first line protection. Our internal control information disclosure standard in recent years has been greatly improved, but compared with perfect foreign internal control mechanism, there are still defects. On April 26,2010, China promulgated the enterprise internal control evaluation guidelines which put forward the concept of significant deficiency in the internal control, but it did not give a specific standard. Especially, the current domestic research on significant deficiency in internal control is still rare. Therefore, this study could help perfect the standard of deficiency disclosure in internal control of listed banks, and improve the current disclosure situation both theoretically and practically. Based on annual reports of listed banks from 2007 to 2009, this paper analyzes the significant deficiency disclosure in internal control and its classification, hoping could contribute to subsequent research.Based on a paper writed by Ge and McVay (2005), this paper builds a classification system for deficiency in internal control of listed bank, which is a highly risky industry. We list every type's concrete manifestation. With annual reports of listed banks in 2007-2009 as the research object, this article classifies internal control deficiency, and discusses each sort. This paper explores our listed banks' internal control disclosure carrier, the amount of information, and summarizes the main defect types and internal control information disclosure's existing problems, analyzes the causes and puts forward some suggestions for improvement. This paper is divided into six chapters, each chapter is summarized as follows:The first part is an introduction, which states the motivation and meaning of the topic as well as the theoretical and practical significance of the study. On the basis of the review of both domestic and foreign research, this part also points out the content and methods. The second part describes the theoretical basis of internal control disclosure, including several theories, such as agency theory, asymmetric information theory and decision usefulness theory. This part also introduces both domestic and foreign norms of information disclosure of internal control.Partâ…¢is the focus of this paper, which introduces the domestic status quo of information disclosure of internal control. It statistics manually the information showed in listed banks'annual report, and analyzes the situation mainly from two aspects:first, status quo of information disclosure, including disclosure carrier, the amount of information, defect type, and multi-year analysis; second, the summary of problems in disclosure of internal control. Partâ…£analyzes the causes of above problems, including lack of relevant legal norms and supervision, the cost of information disclosure of listed companies, and subjective reasons. Partâ…¤gives some suggestions of perfecting the disclosure situation. According to the status quo and statistical results, this part gives suggestions from improving related laws and regulations, strengthen supervision of disclosure of internal control, reducing cost and improving awareness of information disclosure. Partâ…¥is conclusion.This paper's innovation is that it uses a classification system for deficiency in internal control of listed bank and statistics manually the information showed in listed commercial banks'annual report of 2007-2009, and it researches on present situation of information disclosure of internal control, and specifically analyzes the amount of information and main defect types, finally, according to causes, it gives suggestions for improvement.As to the research methods, this paper uses descriptive statistics, also combines qualitative research with quantitative research. As to topic selection, this paper chooses "internal control information disclosure", which is a highly concerned topic, and combines "Corporation Internal Control's Evaluation Guidelines" promulgated on April 26,2010. It has strong theoretical and practical significance.