The Influence Factors Of Internal Control Information Voluntary Disclosure Of Listed Companies

With the exposure of several listed companies' financial scandals at home and abroad, more and more people pay attention to the system of internal control of listed companies, the requirements of the listed companies' internal control disclosure are increasing. Securities regulatory authorities issued regulations and strengthened supervision, made the internal control of listed companies to become mandatory disclosure of information. Many high-quality listed companies disclose more information on the internal control voluntarily to increase the transparency of the company. The high-quality listed companies transfer signals to the capital markets to get investors. Based on this background, this paper empirical studied the characteristics of listed companies which disclosed internal control information voluntary, also studied the behavioral factors and motivation of these companies which transfer signals to the capital markets.This paper covers the following five parts:The first part is an introduction. This section introduces the research background and significance. In order to meet the capital market's demand of the internal control information of listed companies, discharge the liability of management and reduce asymmetry of information, high-quality listed companies will choose to disclose information on internal controls voluntarily. Internal control report as a part of voluntary disclosure of corporate information improves corporate transparency, allowing investors to make the right investment decisions. This paper reviews the related literature on internal control at home and abroad, focused on the previous concentration and trends, and chooses to study the factors influence voluntary disclosure of internal control information of listed companies. This paper selected to study non-financial listed companies' internal control information of 2008 annual report in Shanghai Stock Exchange, it adopt logit model to empirical analyze the hypotheses, and draw a conclusion.The second part introduces:the relevant concepts of internal control information disclosure. First, this part introduces the definition of internal control at home and abroad. Refer to COSO internal control report, the concepts of internal control in COSO report is the basis of the study, that internal control is the process of management and other employees to achieve, which consists of the control environment, risk assessment, control activities, information systems and communication, control supervision, to ensure the business objectives, objectives of financial reporting and compliance goals.Then this part introduces the concept of internal control information disclosure, that the listed company discloses the information of internal control to the external information users.The third part introduces the evolution of internal control information disclosure system. As the representative of the Western developed countries, this part first expounded the USA's evolution of internal control information disclosure system. Since 1978, the United States Securities and Exchange Commission and other proposed that the listed companies should disclose the internal control information, but it failed to make the proposal to implement. Until 2002, the "Sarbanes-Oxley Act" promulgates that the public companies' disclosure of internal control information mandatory.As China's capital market started before long, the public company governance and management, and external information users come to realize the importance of internal control and the information disclosure of internal control, regulatory authorities has introduced a series of laws to promulgate the public companies to disclose the internal control information. In 2006, the Shanghai Stock Exchange and Shenzhen Stock Exchange have been awarded the internal guidelines" mandatory the listed companies to internal control disclose information.The fourth part is the theory. This section introduces the principal-agent theory and signaling theory. In modern enterprise system, the ownership and management rights have been separated, the operators should disclose variety of information about the company-to the owners to discharge the responsibility. However, due to the asymmetry of information, the operator may pursue personal interests, and have a "moral hazard" problem, and then the owners require operators to disclose more information to reduce information asymmetry to enhance corporate transparency. Because of information asymmetry, it will lead capital markets adverse selection, resource allocation is invalid, and make the financing costs up. In order to reduce financing costs, the operators will issue a signal to the capital market to highlight its advantages, access to investor favor. Voluntary disclosure of internal control information is the business managers to send out "signals" of the process.The fifth part is the empirical analysis. This is a key part. This paper selects Shanghai non-financial listed companies which voluntary disclosure the internal control report or not as the research object, use logit model to empirical analyze 746 samples of the company's data through Statal 0 statistical software. This paper empirical studies characteristic of listed companies which disclose internal control attestation report from profitability, firm size, whether the violation, re-financing requirements, listed age, internal audit department setting, growth and ownership concentration in eight aspects.Empirical studies have shown that the better the quality of internal control of companies, the more likely the listed companies disclose internal control attestation report:(1) company size, have a re-financing needs, set up internal audit departments of the companies more willing to disclose the internal control attestation report; (2) a company listed on a longer period do not prefer to disclosure of internal control attestation report; (3) ownership concentration, profitability, growth and the emergence of irregularities on the company to voluntarily disclose the control attestation report is not significant.The main limitation of this paper are:First, this paper only select the 2008 non-financial listed companies in Shanghai as a sample, the sample was smaller, did not address all the country's listed companies, and the data for only one year. Second, due to the difficulty to obtain information in data acquisition, views those list companies which has financing needs but failed to succeed in re-financing have no re-finance motive. This factor will have impact on the internal control attestation report.This paper extends the empirical study of voluntary disclosure of internal control information, provides a theoretical foundation and empirical basis for analysis for the follow-up study.