The Market Reaction To The Information Disclosure Of Internal Control

Based on the view of decision usefulness of the information, the information that has been disclosed in the annual report of the listed companies will have influence on the decisions of the shareholders, investors and other stake-holders. So,how do the contents, formats of information on internal control influence the price of the stocks and earnings per share? This essay is devoted to this question.Since the publication of《Sarbanes-Oxley act》, the study, about internal control information disclosure has reached a new stage. In developed capitalized countries, especially in the USA, The research about the market actions of internal control information disclosure has yielded a rich harvest, whether in theoretical fields or in practical fields. However, in China, studies on this field are few, there are many improvements for us.Based on the related economic theories, for example, the principal-agent theory, cost-benefit principle, signal transmission theory, information asymmetry, this essay made some analyses. We have considered relevant knowledge on auditing and economics. We select samples from 2007-2009 Chinese A-share listed companies in shanghai security exchange. Meanwhile, the relevant analysis model was established, in order to study the influence of the internal control information disclosure to stock price. We mainly discussed such factors as whether the listed companies disclosed their internal control information in detailed, whether the internal control are audited, whether there are some serious flaws in the internal control of the listed companies. In the end, we came up with some suggestions.The article is divided into five parts. The first part is introduction, it mainly discussed the main research background and significance, the literature review, the main contents and methods; The second part is the theoretical analysis about how the market reacted to the internal control information disclosure, it mainly discussed the relationship between the related economic theories, such as the principal-agent theory, cost-benefit principle, signal transmission theory, information asymmetry and market reactions to the internal control information disclosure; The third part is study design, it mainly included the research hypotheses, research variables and sample selection, model, data sources; The fourth part is the empirical results, it is mainly on the sample data collected by research, design, make the validation process inspection and analysis system, and make reasonable explanation to the empirical results; The fifth part is conclusions and suggestions,In this part,we firstly reached some conclusions.The we came up with some suggestions about how to make the internal control information disclosure perfect.