Research On Information Disclosure Of Internal Control Of Listed Commercial Banks In China

With the bankruptcy of Barings Bank, a growing number of financial organizations and regulators began to reflect on a range of issues caused by loss of internal control system and imperfections of information disclosure. Numbers of well-known companies such as Enron, WorldCom with behaviors of financial frauds, shocked the world, at the same time, these behaviors also promoted the scholars to research on the information disclosure of internal control, and the government to promulgate the Sarbanes—Oxley Alex bill. The promulgation of the Bill, that promoted the level of industry regulation and the improvement of the corporate governance and also increased the penalties for financial frauds, to some extent, has been generally accepted by the world. With the outbreak of the financial crisis, a large number of banks in the United States went bankrupt and the bank of Societe Generale in France exposed scandals. The source is:the lack of internal control. At this point, the industry reached a general consensus that rigorous norms about the information disclosure of internal control should be laid down.In China, since the crisis had happened in Southeast Asian, the regulatory authorities began to learn a lesson and strengthen the financial regulation, according to the financial situation in China. This opened the prelude to the study of information disclosure of internal control.In recent years, the Shanghai Stock Exchange and the Shenzhen Stock Exchange promulgated the Guidelines for Internal Control; the CBRC issued the special provisions for information disclosure of commercial banks to require listed companies to publish internal control self-evaluation report and the audit report accompanied by the annual report.The basic norms about internal control in the enterprise published in2008and the first supporting guidelines published in2010, have improved the system of information disclosure of internal control. We believe that disclosure of internal control is necessary for the following three reasons. First of all, the commercial banks with high-risks play a very important and irreplaceable role in a country’s economic and financial system, loss of internal control can lead to severe economic consequences. In such circumstances, the banks disclosing information about internal control, on the one hand, can make banks pay attention to the construction of the internal control and the improvement of corporate governance, on the other hand, relevant information can be passed to the outside, displaying the effectiveness of internal control, and helping investors and creditors make the right decisions; Secondly, as studies on internal control in China is relatively late, the domestic scholars focus on the analysis of the status quo and problems, but often overlook in-depth explorations of the cause and lack systematic and comprehensive analysis. This provides a direction for my study. Finally, many problems about disclosures of the listed banks on the information of internal control, seriously affect the development of banking sector.In order to promote the development of China’s banking industry and ensure the stable operation of the financial system, we must pay attention to the disclosure information of internal control and should carry out a thorough study.In this paper, I summarize theoretical results at home and abroad and analysis the status quo, problems, and the reasons for these problems about the information disclosure of internal control in China’s listed banks and propose further development direction, trying to make a contribution to the improvement of the bank’s internal control system.This paper mainly consists of five parts:The first part analyzes the development situations about the information disclosure of internal control in China’s listed banks and summarizes relevant literature. In addition, the research methods, ideas and innovations are described.The second part analyzes the disclosure information of internal control theories, laying a foundation for further research.The third part compares the system evolutions about the disclosure information of internal control in China, the United States and the United Kingdom, hoping to be inspired.The fourth part analyses the status quo through the method of descriptive statistics, make attempt to find the problems and try to explore the reasons.The final part is trying to propose further measures.The method of this paper is a combination of normative research and descriptive statistics.Innovations in this article are:Firstly, in the summary of existing research results at home and abroad, and the relevant theoretical analysis, I find the particularities about the information disclosure of internal control in commercial banks.Secondly, this paper analyzes information disclosure of internal control at the operational level creatively.Thirdly, after the analysis, I establish an internal control methods and evaluating system about information disclosure, in an attempt to provide a guide for the improvement of information disclosure of internal control in commercial banksOf course, there are still some limitations:The article collected information in the Annual Report by hand and manual collection may enhance the subjectivity;It’s a great pity that the article doesn’t build a model for the information disclosure of internal control, but from another point of view, some others can go on studying.