Research On The Quality Of Information Disclosure Of Internal Control Of Listed Companies In China

After the increasing outbreak of financial fraud scandals, such as Enron, WorldComand other international company in the United States, investors awared of a potentialinvestment value of the company clearly. This value not only has a good operatingperformance and broad prospects for development, but also has a complete, resonableand effective internal control system. There are the same problems in China’s market.From Zhengbaiwen, Yinguangxia financial fraud cases to the huge losses of theCNAF(China National Aviation Fuel), all exposed the weak system of internal controland lack of information disclosure. Therefor, within the system, effective research tocontrol information disclosure is necessary practical significance: First, protect theinvestors; Second, increase the awareness of management’s internal controls; Third, theresults of this study provide the necessary information for the regulatory authorities.In the study of the quality of information disclosure of internal control, we use theaccounting information to defined it. On the quality measurement methods, the paperuses content analysis method to build an appraisal forms for checking the disclosureinformation. Examine the level of quality, and then evaluate them. Our data sources comefrom online database called Resset and www.cninfo.com, searching for ShenzhenA-share listed companies of manufacturing industry in2010, downloading their publicannual financial report, audit report and the internal control self-evaluation report. Firstqualitative analysis the meaning of the quality, the characteristics and influencing factors;then make the hypotheses based on other researchers’ methods and conclusions; thendefined the explanatory variables and use SPSS17.0statistical analysis software forlinear regression analysis. The results show that the total assets of the natural logarithmof the numer of transactions and the ST status both have the most significant impact onthe quality of disclosure information of internal control.The results show a high quality of information disclosure of internal control inmanufacturing industry in2010Shenzhen. The total assets have a significant positivecorrelation while the transaction state(whether ST) has a significant negative correlationwith the quality of information disclosure of internal control. Other factors don’t exist asignificant correlation. There is still a lack of sufficiency in the companies’ annual reports, audit reports and internal control self-evaluation reports. The paper suggests thegovernment sets a standard on quality of information disclosure of internal control, andthe stock exchanges strengthen their evaluation work, and the listed companies setinternal auditing department. All of these will help investors to make their decisionsmore certainly.