The Research On The Market Effect Of Internal Control Information Disclosure Of Listed Companies

The eruption of the Enron and WorldCom incidents is a wake-up call toregulators and investors. Many countries have introduced their ownSarbanes-Oxley Act to regulate the behaviors of internal control informationdisclosure. Internal control information disclosure becomes the focus ofattention. This article studies the market effect of internal control informationdisclosure. It firstly reviews and summarizes the research on the internalcontrol information disclosure both at home and abroad, and then introducesthe relevant concepts and discusses the basic theory of its impact on the stockprice. After combing the information disclosure development process of thelisted companies in China, it uses Descriptive statistics on the analysis of theconduct of the internal control information disclosure of listed companies,and then to study their problems and causes. On this basis, it conductsempirical analysis. With manually collected annual reports, internal control disclosure reports and stock prices, according to the level of disclosure ofinternal control information, the companies are divided into different samples.The time window is the stock days before and after the annual report ispublished; the research method is event study method; the proxy variable ofthe market effect is CAR. The research gains that the disclosure of internalcontrol information does have impact on capital market and differentinformation disclosure quality would cause CAR differences. Internal controlinformation disclosure of high quality has a positive impact on stock pricebut the low quality impact on stock prices is not significant. Using multipleregressions to control other variables in the annual reports that affect thestock price, it shows that the impact of internal control information disclosureon CAR is not significant. By the research conclusion, the article analysis theconclusion and sets suggestions to political departments.