Research On The Market Effect Of Internal Control Information Disclosure Of Chinese Listed Companies

Since series of vicious financial information as the "Enron", "WorldCom"fraud case came to light; internal control disclosure of information has aroused widespread concern. The United States in 2002 issued a "Sarbanes-Oxley Act," requires public company management to evaluate the internal control, issued internal control self-assessment report, and the report must also be audited by certified public accountants. China's regulators have increased the disclosure of internal control regulation, in May 2008, the Ministry of Finance, the Commission, Audit Commission, the Banking Regulatory Commission, Insurance Regulatory Commission jointly issued the "Internal Control Standards," requires companies to evaluate the effectiveness of internal control,issued self-assessment report, and hire an accounting firm to audit the effectiveness of internal control. In April 2010, five ministries issued" The guidelines for internal control supporting" further provide the standard on the disclosure of internal control information. Listed company's internal controls and transparent disclosure of information, reduce the degree of capital market information asymmetry, lower transaction costs, thereby enhancing the efficiency of capital markets, improve the allocation of resources, and promote economic growth, but also conducive to helping investors understand the company's internal control standards, to make investment decisions, should cause the attention of company's management and investors.In this paper, we have tested and demonstrated 854 listed companies of Shanghai A-share 2010, through examining the stock price of short time window before and after the disclosure of interl control information, try to analyze the market effects of disclosure of internal control information. First, set the related theory about the internal control disclosure of information, according to internal control disclosure, divide the Shanghai companies into "standard disclosure group" and "non-standard disclosure group," analyze the situation of China's listed company's internal control disclosure of information. Secondly, using of the event study, do the empirical test about the market effects of the listed companies'disclosure of internal control information. The study finds that different disclosure of internal control information to reflect different markets; standard set's disclosure of internal control information have a positive reaction on the market; there are significant differences of market;reflect between standards group and non-disclosure group, the former significantly larger than the latter, indicating good disclosure of internal control information to reflect the market better. Finally, to strengthen the disclosure of internal control information, we propose to strengthen the regulation and punishment on the disclosure of internal control information, to improve the CPA's professional level.The paper provides empirical data to perfect the disclosure system of internal control information, help investors make the right decisions, and also expand the scope of the internal control theory, enrich the internal control theory.