A Research On Influencing Factors Of The Disclosure Of Internal Control Deficiencies Under Mandatory Disclosure Rules

From a practical United States, Britain, France and other mature market economies of view, a sound and effective internal control is considered an effective way to solve the company many potential problems. Seen in this light, only a sound internal control system can ensure its effectiveness. But since the 1970 s, frequent domestic and foreign financial fraud fully exposed problems of the company’s internal control system. Due to the existence of these problems, the reliability of financial reporting is by a severe challenge, and it directly affected investors to make the right decisions. Therefore, in order to further standardize and improve the building condition of the internal control system and strengthen internal control disclosure, countries have enacted laws and regulations relating to internal controls, such as the United States enacted "Sarbanes- Oxley Act" in 2002, the regulations forcibly mandate listed companies to disclosure internal control information of the enterprise; China has promulgated the "internal control Standards" in 2008 and enacted "Enterprise internal Control guidelines" in 2010. So far, China’s internal control standard system has taken shape. According to the implementation requirements of the set of norms system, since January 1, 2012 main board listed companies of Shanghai and Shenzhen Stock Exchange began to implement the internal control norm system and the system forcibly mandates listed companies included in the scope to disclosure the internal control information of the enterprise.Internal control deficiencies information as an important part of internal control information, the disclosure is bound to be concerned about the investors and external regulatory bodies. Under mandatory disclosure rules of China, corporate truthfully disclose the internal control deficiencies information? What are factors on disclosure of internal control deficiencies? These issues deserve our in-depth study. Based on the literature review and theoretical analysis, this article selected Shenzhen A-share main board listed companies that disclosed internal control self-assessment report of 2012 as the research object, using descriptive statistical analysis, correlation analysis and Logistic regression analysis approach to do an empirical research about influencing factors of the disclosure of internal control deficiencies. The study found: companies included in the scope of the internal control norm system are more likely to disclose internal control deficiencies, and the relationship between the two show significant correlation, indicating that the country’s policies and regulations played a positive promotion effects on the disclose of internal control deficiencies information of listed companies; But adjunct case of chairman of the Board and CEO as corporate governance characteristics proxy variable and the size of the accounting firm as external audit feature proxy variable don’t significantly affect the disclose of internal control deficiencies. At the same article also verifies the Agency, total assets, number of subsidiaries, operating profit, and whether ST five control variables on the effect of the disclosure of internal control deficiencies. Finally, this paper puts forward countermeasures above conclusions to promote the effective implementation of the internal control standards system.