Research On Disclosure Of Intenral Control Of Chinese Listed Companies

The shocking corruption of giant "Enron" attracted scholars’attention to the opennessof the corporation’s internal control. Shortly after the fall of "Enron", the Parliament passedthe "Sarbanes-Oxley Act", which requires mandatory disclosure of internal controlinformation for a corporation.In China, the early stage of disclosure of internal management information isvoluntary. With the boom in economy, especially after joining WTO, more Chinesecorporations are expanding and competing directly with international peers. As themanaging structure is becoming more complex, there appear with more scandals offinancial fraud, which seriously damages investor’s profits and confidence. After learninglessons from domestic and international experience, Shanghai Stock Exchange andShenzhen Stock Exchange respectively announced their requirement on the mandatorydisclosure of the corporations’ internal management, issued on June5th,2006andSeptember28th,2006, and coming into effect on July1st,2006and July1st,2007.Afterward, the Ministry of Finance, together with other five ministries, issued the "basicnorms of internal control", further defining the mandatory disclosure requirements oninternal management information.This article employs agency theory, asymmetric information theory,signaltransmission theory, and the latest annual reports from these corporations, to establish therelated model and analyze the effectors, later giving suggestions for disclosure of internalcontrol system.This paper is divided into six parts: The first part is an introduction, describes theresearch background, significance, methods, and domestic and international researchprofile; The second part is the basis of relevant concepts and theoretical introduction,introduces the internal control and internal control disclosure of the conceptual framework,development, and application of relevant theories of information disclosure of internalcontrol analysis; The third part describes the information disclosure of the status of internalcontrols, first introduced at this stage and the disclosure of internal control and disclosureof relevant laws and regulations of the main elements and draw the relevant statisticsdescribing the current internal control disclosure of the overall situation and Problems; Thefourth part is the internal control disclosure Empirical analysis of the latest announcementson the public documents in2010to quantify the regression model, and concluded on thisbasis; The fifth part is mainly based on three or four chapters of the listed company of China introduced a complete set of information the disclosure of internal controlsuggestions; Part VI is the conclusions of the study and prospect.