A Study On The Correlation Between The Internal Control Auditing Of China Listed Company And Stock Price

Internal control can work out within board of directors, corporation of management and other staff .It is a process to provide reasonable assurance for achieving effectiveness and efficiency of operations, reliability of financial reporting, as well as compliance with applicable laws and regulations and so on. So it has significant meaning to ensure accurate, reliable and timely financial reporting.In the modern capital markets, investors have been fully aware of a good new corporation not only means good performance of business and development prospects, but also must have good internal control. Internal control is a product of modern management; the emergence and improvement of technologies and methods to promote the audit system from a detailed audit to a sample audit of internal control. The auditors evaluate internal control, define the audit scope, approach and emphasis to improve audit efficiency. The auditing of internal control becomes the symbol of traditional audit to modern audit and the information asymmetry problems researched by the modern management theories, the principle agent hinder the efficient allocation of capital market resources. Information disclosure in mitigating these issues play a role of a bridge. Through information disclosure, the management communicate with the market of internal information in a timely manner, reducing the information asymmetry and agency costs. Meanwhile this meet the regulatory requirements or achieve their own purposes. However, the results of the management information disclosure quality and the different types of market participants has always highly concerned, and for management assessment of internal control of information disclosure to be the recent focus of the market. It is an extremely important indicator for participants to compare.This essay reviews the internal control correlation with stock prices and provides capital market participants a referential basis, it also has theoretical and practical meanings. Firstly, it describes requirment for the study of the theories and the lack of researched literature the topic. Secondly, it applies the cumulative abnormal return model and multiple regression and correlation analysis to reach a conclusion: that is a message there are information included in the information disclosure of internal control auditing from 2007 to 2009 in the Shenzhen stock exchange. The capital market has a significant positive response to the standard audit opinion of Certified Public Accountant issued, to non-standard is the negative. Finally, the paper make some policy recommendations based on theoretical and empirical research results.