Research On Internal Control Deficiencies Disclosure And Corporate Value In Listed Companies

Internal control throughout the production and operation activities in all aspects. It can help the enterprise to avoid risks, and it is an important guarantee to achieve business goals. In recent years, there are many financial scandals, this situation makes more people pay attention to the internal control, while the internal control disclosure of information is one important way to obtain such information. June28,2008, the Ministry of Finance, Securities and Futures Commission, the Audit Commission, the China Banking Regulatory Commission, China Insurance Regulatory Commission jointly issued The enterprise internal control basic norms, this indicated that our internal control self-assessment report disclosed by the voluntary disclosure to the mandatory disclosure. April26,2010, five ministries jointly issued The supporting guidelines for enterprise internal control to further strengthen the internal control information disclosure requirements, the guidance also makes internal defect information since2012in Shanghai and Shenzhen Stock Exchange began to mandatory disclosure. Although these provisions improved the system of internal control standards, its actual implementation effectiveness and enterprise value of internal control deficiencies disclosure is still worth considering.In view of this, this paper collected2010-2012internal control relevant reports, the study found that the number of information disclosure of internal control deficiencies increased year by year, but the implementation of the system is still in place, and disclosure of information has improved, the information become more valid. Meanwhile, the paper based on internal defect information into the system mandatory disclosure stage background, selected2012Shanghai A-share listed companies as samples, according to the principal-agent theory, signal transduction and other theories, based on previous studies on the proposed hypothesis, using multiple regression to analysis the internal control deficiencies affect the value of the enterprise. We found that the enterprise value of disclosed internal control deficiencies is lower than the company’s undisclosed corporate internal control deficiencies. And the low value of the disclosure of the substantive defects. Finally, this paper also presents policy recommendations to provide empirical evidence of improvement.By studying the disclosure of internal control weaknesses’ negative impact on enterprise value, this article hopes to call external stakeholders to pay more attention on the quality of disclosure information in internal control. And this article expects to provide realistic suggestions for the relevant regulatory authorities to perfecting the system of internal control weaknesses disclosed. In the long run, the mandatory information disclosure of internal control deficiencies will force listed companies to strengthen internal control disclosure of information in order to reduce defects, which virtually promotes the continuous improvement of internal control and improvement of asymmetric information. All this can help investors make a proper assessment.