| Since2001, a series of outbreak of domestic and foreign financial fraud scandal, such as Enron and World Communication financial fraud case in the United States, and the domestic Joan Min Yuan, Yin Guang Xia and China Aviation Oil events, caused the government and the public’s attention, also initiated the securities supervision department of the market and the government thinking of the internal control system of enterprise, thus pushing the series of enterprise internal control system of supervision, the promulgation of the enterprise internal control design and the implementation status began to become supervision department of the regulation of listed companies on the object. For example, in2001the case of fraud happened in the United States involved internal control failure problem, the U.S. congress in2002disclose the Sarbanes Oxley act. In this act, congress clearly requires listed company disclosure regular report, at the same time disclosing the internal control evaluation report, and requires the report must go through the review of the external auditor. After this, Japan, European countries also have requires the whole enterprise to disclose internal control information. Also attach great importance to domestic internal control and supervision of the construction of legislation, It have made a lot of efforts for internal control standard. In2006Shenzhen and Shang Jiao Suo began to require the board of directors of the listed company to disclose an internal control evaluation report, and encourage the listed company hiring external auditors to certificate the effectiveness of internal control evaluation report issued by the board. Five ministries of finance joint internal control field experts, scholars, after two years of hard work, and finally in2008enacted the enterprise internal control basic norms,"and issued the related guidelines (including internal control reference guide, internal control evaluation guidelines and internal control audit guidelines) in2010, so far our domestic internal control standard system also established. Researchers widely believe that theory, the optimization design and the effective implementation of the internal control can make the company to realize its expected goals, and help reduce the happening of the violations. Especially the risk management of enterprise based on internal control system, it also can help enterprise timely recognize and defense risk, dissolve the enterprise management in the process of the crisis, so as to realize the enterprise’s sustainable and stable development. This paper is based on the theoretical premise, demonstrates that the internal control will help increase the reliability of the financial report, business efficiency and effect; it will help reduce the possibility of violations.This paper had the normative research and empirical research method. One standard part of contents as follows:First, summarized the domestic and foreign relevant literature about internal control. To the foreign literature, it is mostly on the factors which decide disclosure of the internal control information and internal control flaw information research. And different from our country, America’s internal control information was in mandatory disclosure stage, the government mandated the listed company to disclose internal control reports. So most of the literature in the United States is around the specific disclosure report on the research contents of the internal control; the research literature is very rich. For the domestic literature, because regulators don’t mandate to disclose the internal control of information, so study about this was some limited. Most of the literature is around the present situation of the internal control reports disclosure and the characteristics of the listed firms that voluntarily disclose of internal control reports.Second, the theory and the meaning of internal control, the relationship between internal control and governance are discussed in this paper. For internal control and the relationship between internal control and corporate governance, the author thinks that the internal management structure is to belong to the control environment factors of the internal control, perfect corporate governance can to provide strong organizational guarantee for the operation of the internal control. The article also describes the theoretical basis of internal control and information disclosure clearly, including control theory, new institutional economics theory, the principal-agent theory, and signal transfer theory. Three, discussed supervision about the internal control of information disclosure. Internal control reports disclosure of the listed company can be to improve the management and the consciousness of the importance of internal control, to deepen the understanding of the internal control, also find the internal control execution defect in the process of the implementation of internal control evaluation, so as to prompt to reduce control flaw, perfect the internal control system, the better to play the role of internal control.For empirical research part the content as follows:First, the hypothesis and model. The paper mainly studies the high quality of the internal control is helpful to ensure the reliability of the financial report, and reduce the possibility of violations, improve the management of the enterprise efficiency. In this paper whether disclose internal control verification report as alternative variable of internal control quality, therefore put forward three basic assumptions, hypothesis1:disclosure of enterprise internal control verification report ensure the financial report high reliability, hypothesis2:disclosure of enterprise internal control verification report low the probability violations occur, hypothesis3:disclosure of enterprise internal control verification report heighten its operation efficiency. Consider each explained variables also will be affected by other important factors, so according to each hypothesis I identify a model, so has established three models.Second, the selection of variables. Among them, the explanation for the quality of the internal control variables, this paper, based on the signal transmission theory, think high quality internal control of the listed companies will be voluntarily disclose internal control verification report, and the firm who disclose internal control verification report will happen a lot of cost, and based on the consideration of cost and benefit, only those who are perfect in the internal control, greater the earnings than the cost in disclosure of internal control verification report will only motivated to voluntarily disclose internal control verification report. Based on the above two reasons, this paper argues that integrate internal control verification report is effective alternative variable of a high quality the internal control. Explained variables1, which the reliability of the financial information, considered assessment results of the information disclosure of Shenzhen are authority and comprehensive, and many scholars also used the evaluation results as financial report quality alternative variable, so this paper consider assessment results of information disclosure of the listed company published by ShenJiaoSuo as the measure of the internal control quality. Explained variables2, the illegal behavior of the company, it include the public punishment, denunciation and public criticisrn given by ShenJiaoSuo and ShangJiaoSuo because of violating relative rules. Because violations quantitative index of the listed company is badly identified, so this paper use the virtual variable, companies happened violations, value is1, not happened violations, the value is0. Explained variables3, business efficiency and effect, this paper adopts a comprehensively index which can reflect the efficiency of input and output of the company business, the asset returns index.Third, regression analysis section. For hypothesis1, according to the first descriptive statistics, the conclusion is that the internal control verification report revealed its accounting report quality of the listed company, there relationship is high corresponding, which primarily validated hypothesis1. Then do multiple regression analysis, according to the regression results:the return of the independent variable coefficient under the level of0.01is significantly positive correlation; explain the internal control and the quality of accounting report have significantly positive correlation. And all the control variables and the dependent variable are also significantly correlative. To assumption two, first of all, according to results from descriptive statistics, companies which disclose its internal control verification report. Its probability of violations is low, primarily validated assumption2. Then do multiple regression analysis, the regression results indicated that the return of the independent variable coefficient under the level of0.1have significantly negative correlation, explain the internal control and violate compasses behavior have a significant negative correlation. For hypothesis3, descriptive statistics preliminary results also confirmed the hypothesis3, explain that company’s management efficiency who discloses the internal control verification report higher than who not disclose. For multiple regression analysis indicates, internal control and enterprise management efficiency has a significantly positive correlation.Fourth, based on the front theatrical and empirical analysis, I put forward some Suggestions. From the enterprise itself, it should enhance the understanding of the level of internal control, constructing sound internal control system. Of course, the enterprise can start from the direction of some key, such already can ensure the implementation of the internal control effect, also can avoid unnecessary waste. From the government supervision, supervision departments should strengthen the construction of internal control and the execution of the supervision, for laws and regulations of violation, due to the failure of the internal control to violate compasses behavior, we should increase penalty. Investors should improve recognition of the internal control disclosure; fully understand the enterprise condition, which will guide investors for making investment decision.Fifth, finally some limitations of this study, this paper expound the prospects for future research. Begin from2011, the government mandated disclosure of the listed company internal control evaluation report and internal control verification report, now our country’s internal control information disclosure come to the mandatory disclosure stage. According to internal control reports, the study of the specific content will also more and more.And as our country’s internal control regulatory system standard, disclosure rules of internal control information will refine, In the future research about internal control defects information will be a key aspect. |
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