Listed Companies In China: An Empirical Study Of Factors Affecting The Internal Control Defects

With the release of <Corporation Internal Control Supporting Guidelines>, internalcontrol becomes the key research for a period of time. Identifying the main factorsaffecting the internal control deficiencies has a far-reaching significance, whether tocompany’s management, independent auditors, social regulatory authorities or marketinvestors. In this study, we take the366listed companies in2010Shanghai StockExchange who disclosed internal control self-evaluation report as the object, build aconceptual model on the internal control deficiencies, expecting through descriptiveanalysis, correlation analysis and logistic regression analysis to identify factors ofimpacting corporate internal control defect. The study found that, the relevance amonginternal control deficiencies, company’s market value, and subsidiary number was notsignificant. I believe this is due to the internal control deficiencies information disclosedby China’s listed companies is not objective. Sample analysis results and theassumptions do not matching results inspired China to constantly improve thespecification of internal control information disclosure, and improve the quality ofinternal control information disclosure.