The Correlation Study On Internal Control Information Disclosure And Equity Agency Cost

Corporation governance and internal control information disclosure are not capable of beingseparated, and the latter influences the corporation equity agency cost directly. The author focuson the small and medium enterprise board of Shenzhen, classifies the related laws, regulationsand rules, introduces the relevant research achievements both in abroad and in home.In the empirical part，we take data of Shenzhen small and medium enterprise board listedcompanies from2010to2012as samples, and found that more than95%companies disclose theinternal control self assessment report, and less than40%companies disclose the internal controlattestation report.Then, we examine the correlation of internal control information disclosure and equityagency cost, after controlling for the other factors, the internal control self assessment reportdisclosure is not significant negative correlated with managers agency costs and controllingshareholders agency cost, on the other hand, the agency cost of managers and controllingshareholders for companies which disclosing internal control attestation report is lower than thatof companies not disclosing. What’s more, the agency costs of managers and controllingshareholders of the listed companies disclosing both reports is significantly lower than the listedcompanies which only disclosing self-assessment report. Finally, proposals are made to improvethe level of internal control information disclosure at two sides.