Research On Information Disclosure Of Internal Control In The Annual Reports Of Chinese Listed Companies

Since the beginning of the 21st century, a series of financial cheating scandals has drawn more and more attention of the accounting circles at home and abroad. So the SOX Act was passed by the Congress of the U.S.A., which stipulates strict regulations on the information disclosure of internal control of listed companies and aims to set up the effective system to regulate the listed companies and recover the confidence of investors. The serious omission and failure of the internal control of listed companies also account for a series of cheating scandals in securities market in recent years. In 2006, Shanghai Stocks Exchange (SSE) issued the"Directions of Internal Control for Listed Companies"based on the SOX Act, which demands that the listed companies disclose the information of internal control in annual reports and the information be evaluated by the CPAs.In China, however, the regulations on the information disclosure of internal control of listed companies have just been issued, and the study on internal control information disclosure is on the initial stage. Based on the above considerations, this article analyses the annual reports of 2006 of the listed companies'in SSE and finds the problems in them, and tries to bring forward some suggestions on improving the information disclosure of internal control in China.This article consists of four parts. The first part presents the necessity and theoretical basis of internal control information disclosure of listed companies, and introduces the history of internal control information disclosure at home and abroad. The second part compares the norms of the Chinese internal control information disclosure with those of the USA, introduces and analyzes the evaluating theories of the two countries, and based on the advanced viewpoints of the USA, puts forward some important suggestions on the perfection of the disclosure of internal control information disclosure in China. The third part analyzes the situations of the internal control information disclosure according to the annual reports of the listed companies in the SSE in 2006, and by descriptive statistical and empirical analysis, studies the significant factors influencing the internal control information disclosure of listed companies so as to find problems in the implementation of the"Directions of Internal Control for Listed Companies". The fourth part puts forward, based on the problems found in empirical studies, some suggestions of the internal control information disclosure of the listed companies in China from the four aspects of improving regulations, strengthening supervision, promoting corporate governance and unifying evaluative standards.