The Influence Of Ultimate Ownership Structure On Quality Of Internal Control Disclosure

In recent years, a successive outbreak of the financial fraud scandals whichoccurred in the capital markets at home and abroad, which make the investors querynot only the effectiveness of the internal control of listed companies, but also theauthenticity of internal control information issued by them. Therefore, foreign anddomestic scholars view the quality of the internal control information disclosure asa hot research topic. When they study the factors influencing the quality of thedisclosure of internal control information, the ownership structure, as the foundationof property rights of a company’s administrative structure, is increasingly drawingthe attention of scholars. As they depicted the ownership structure, the majority ofscholars were in favor of direct ownership mode. Considering the highly-centralizedstake allocation in our country, using the direct ownership structure is obviously notreasonable. Therefore, this essay attempts to study the impacts of ultimateownership structure on the quality of the disclosure of internal control information.Hence, the research achievements in the field of internal control informationdisclosure quality at home and abroad are reviewed seriously in this disclosure. Andthis disclosure also reviews and summarizes the theories relevant to the disclosureof the internal control information. Meanwhile, relevant data of the684non-financial, insurance companies listed on the shenzhen main board in the two yearsof2010and2011are adopted in the process of the multiple regression test whenseeking the the relationship between the five characteristics of the ultimateownership and the quality of the disclosure of internal control information issuedby listed companies.In this paper, the results are that:(1) the correlation between the ratio of ca shflow right of ultimate owner and internal control information disclosure quality ispositive significantly.(2)The correlation between control right of the ultimateowner and the internal control information disclosure quality appears an significantinverted U type curve.(3) As the degree of the deviation between the control rightof the ultimate owner and the cash flow right of it becomes greater, the internalcontrol information disclosure quality becomes weaker.(4)As regard to the qualityof internal control information, the listed company controlled by the state ultimateowner has a better performance than the non-state company.(5)The counterweightwhich comes from the institutional investors against the ultimate owner is related tothe internal control information disclosure quality positively. Fina lly, in accordancewith the results of the empirical study, this thesis come up with some relevantpolicy suggestions to improve the internal control information disclosure quality and to promote the efficiency of capital market.