Impact Of China's High-risk Industry Internal Control Disclosure Of Information Factors

The "Basic Criteria of Enterprise Internal Control" has been jointly issued by Ministry of Finance, Securities and Futures Commission, the Audit Commission, China Banking Regulatory Commission and China Insurance Regulatory Commission on June 28,2008. Meanwhile, the year of 2008 also was the most serious year since the outbreak of world financial crisis. The enterprise at high-risk industry, such as WorldCom, Xerox and other giant corporate financial scandals impact on the global IT industry, and Lenovo Group in 2008 suffered a history of the biggest losing year as well. It is necessary to research the performance of China's listed companies in high-risk industry, and to study effectiveness & disclosure of the internal control.The study selected real estate and information technology industry stocks which were on the list of Shanghai & Shenzhen Stock Exchange by December 31,2008, A-share companies in the annual financial report and internal controls related information as research object. We use the frequency analysis, descriptive statistics, correlation analysis, analysis of variance, regression analysis and other statistical analysis to research the impact on information disclosure with internal control factors-corporate governance, management and audit situation, business environment and market transactions. The study found that the largest shareholder equity ratio, company size, earnings per share, time to market and traded places with the disclosure of internal control the level of detail showing a significant correlation between the controller type, meeting numbers of the supervisors board, assets net profit margin, net interest rates, type of audit observations and regional economic development level and the six explanatory variables are explanatory variables showed more significant correlation between the other 15 independent variables had no close correlation.This study findings included the following items:strengthening the exchange-traded supervision in order to raise the level of information disclosure of internal control effectively; using another "signal" a magic weapon-the internal control disclosure of information to attract investors; strengthening supervision of audit institutions will be conducive to public a more detailed disclosure of company's internal control information; emphasizing the guiding role of public opinion towards the building of economic interests and a double harvest of internal controls; to improve the efficiency of management-level jobs, and not to blindly expand the scale which will be negative to promote the effective internal control disclosure of information.