A Research On Internal Control Information Disclosure Of Chinese Listed Companies

With the development of the market economy and the acceleration of economic globalization, the risks which the listed companies face are increasing. Especially in recent years, the global financial crisis brings a serious impact on a great number of companies. Lehman Brothers and Bear Stearns went bankrupt, the Bush administration seized control of two largest mortgage finance companies of the USA, CITIC Pacific suffered huge losses for investing in derivative financial products, and so on. The occurrence of these events rocked the investors as well as revealed the harmful effects of internal control deficiencies.In 2002, the SOX Act was passed by the Congress of the USA. This act stipulates strict regulations on the information disclosure of internal control of listed companies and aims to set up an effective system to regulate the listed companies and to recover the confidence of investors. In 2006, Shanghai Stock Exchange Internal Control Guidelines and Shenzhen Stock Exchange Internal Control Guidelines were promulgated, which made the disclosure of internal control information for Chinese listed companies. However there are still several problems in practice. Based on the domestic status of the disclosure of the internal control information, we analyze the issue thoroughly in this paper, learns from the SOX implementation and tries to bring forward some suggestions on improving the disclosure of internal control information in China.This paper consists of six parts. The first part presents the research background, the structure, contributions and deficiencies of this dissertation. The second part takes a brief review of literature research on the disclosure of internal control information from home and abroad. The third part introduces the theories related to the disclosure of internal control information, the influencing factors and the significance of internal control information disclosure. And then elaborate the history of internal control information disclosure at home and abroad. The forth part first compares the norms, the people responsible for internal control and evaluation criteria of the Chinese internal control information disclosure with those of the USA. Then we analyze the implementation of the Sarbanes-Oxley Act Section 404 in the United States. Based on the advanced viewpoints of the USA, we also put forward some important suggestions on the perfection of the disclosure of internal control information in China. The fifth part studies on the situations of the internal control information disclosure in China according to the annual reports of the listed companies in 2007. On the basis of a descriptive statistic, we analyze the deficiencies existing in the disclosure of internal control information and figure out the reasons of this status from following two main aspects: objective reasons and subjective reasons. According to all the above analysis, the last part arrives at a number of recommendations of improving the disclosure of internal control information.