Study On Internal Control Information Disclosure Of CHINEXT Listed Companies

With the release and implementing of basic standards and supporting guidance forenterprise internal control, the unified and normative situation for the listed companies to set upinternal control system and related information disclosure is shaping step by step. As animportant emerging part of china’s capital market, researching on internal control informationdisclosure of ChiNext is significant to itself and the whole market.The objects of this paper are internal control self-assessment reports of ChiNext’s153listedcompanies which are assessed as the year end of December31,2010. Then we valuate the wholesituation of internal control disclosure. Firstly, we statistically describe the basic information ofcompanies on the ChiNext board as well as their internal control self-assessment reports.Secondly, we set up an all-around criteria based on5Likert Scale and content analysis tosynthetically assess the quality of internal control self-assessment reports. Thirdly, we discusstwo companies in detail, one is the highest score and the other is the lowest score. Lastly, weproposed some relevant policy recommendations on the basis of the results of research above tothe related parties.According to the comprehensive scoring result, we have these following conclusions:although internal control self-assessment reports disclosure have been a growing consensusamong ChiNext listed companies, the quality of disclosure is very low and information content islimited because of external and internal causes, such as lack of consolidated self-assess rules andinternal professionals. In all, internal control information disclosure of ChiNext listed companiesis superficial. Therefore, we advise related regulators to integrate and detail internal controldisclosure regulations, especially the layout and content of self-assessment report, and thenpromote outstanding reports extensively. Moreover, it is necessary to clearly define subject’slegal responsibility of internal control effectiveness. On listed companies’ side, in order toimprove information content, on one hand, they should take much count of internal controlsystem and risk disclosure consciousness. On the other side, it is urgent to employ professionalson internal auditing, strategy management, risk control, etc.