An Empirical Research On The Influencing Factors Of Internal Control Weaknesses Disclosed In Listed Companies

In recent years, an arrange of business failures in domestic and abroad cases came outdue to lack of risk control mechanisms. Enron in United States、the collapse of BaringsBank、China Aviation Oil and so on make investors realize that the weakness of the internalcontrol could make the beautiful appearance of the enterprise instant collapse.This series of cases awake the various stakeholders the alarm so the world regulatorybodies have issued a series of laws and regulations in order to rationalize securities market.Stringent requirements of listed companies in the construction of the internal control systemcome out, for example,the UK “corporate governance bill "、the US “Sarbanes-OxleyAct”、China “Basic Norms of Internal Control”. Listed companies in china,as promulgated "Basic Norms of Internal Control "in2008and related guidelines, system of internalcontrol disclosure of information gradually become perfected. In “Evaluation of InternalControl Guidelines” explicitly give internal Control deficiencies concept and operationalGuidelines. This support the study on internal control weaknesses informationdisclosure regulations. The related guidelines make the disclosure become the focus whichenterprise managers, external auditors, the supervision institutions and market investors areconcerned about.Author read a large number of documents in domestic and foreign to find this study oninternal control deficiencies. And then the author disclose internal control weaknessclassification and build a conceptual model about internal control weakness based onprincipal-agent theory and so on. Framework of the assumptions built in this article not onlydraws on the research of foreign scholars but also seizes the country’s institutional features.And then this paper start to study China’s listed companies to disclose the impact of factorsof the internal control weaknesses. The authors first collect internal control self-assessmentreport in2010in Shenzhen Securities Exchange, and then by means of logistic regressionmodel verify the three levels of influencing factors of corporate governancecharacteristics, and external oversight characteristics, firm characteristics,.The study result comes that: Companies with large-scale、the unity of the two jobs ofChairman and manager、change of CEO is unwilling to disclose the company’s internalcontrol shortcomings; whether to hire the big four international accounting firms、audit feehave positive impact on discoursing weaknesses; Operation risk、lever of performance haveno significant relationship with Internal control weaknesses. The empirical conclusionsprovides a theoretical evidence for listed companies, investors, regulators about internalcontrol information disclosure...