The Study On The Effect Of Internal Control Information Disclosure On The Corporate Performance

In recent years, starting from the Enron fraud case at home and abroad have staged a series of financial fraud scandal, which exposed the weaknesses currently listed company’s internal control and internal control disclosure of some of the uncertainty generated by the financial ills. In 2002, "Sarbanes-Oxley Act" (hereinafter referred to as the<SOX Act>) by the US Congress, the bill mandates a company listed in the US must be full disclosure deadline for the financial statements, internal control report, the world began to pay attention to strengthening the listed company internal control and supervision. Subsequently, in 2006, China’s foreign-related legal experience summarized in the information disclosure of internal control were issued internal "Shanghai Stock Exchange listed company’s internal control guidelines" (hereinafter referred to<the Shanghai Stock Exchange guidelines>) and the "Shenzhen Stock Exchange listed company Control Guidelines "(hereinafter referred to<the Shenzhen Stock Exchange Guidelines>). In 2008, the Ministry of Finance "Enterprise Internal Control Standards", introduced in 2010 after the "Internal Control Guidelines" (hereinafter referred to as the Supporting guidelines>), mandatory for listed companies in China in the external reporting of financial reporting, but also the report of the company internal control relevant information so that stakeholders can timely supervision of listed companies in the internal control system to build the integrity and authenticity of information disclosure, thus enhancing the internal governance of listed companies and risk capacity to respond. Construction of information disclosure norms and institutions play an increasingly important role in China’s capital market in internal controls.Corporate governance structure includes many aspects, of which internal control is an important part. Therefore, to strengthen the disclosure of related information for internal control of listed companies listed company is essential for investors to understand. When the listed company did not disclose internal control deficiencies existing in its own internal controls in the self-evaluation report,the disclosure of other relevant information allows investors outside to keep abreast of internal control information of listed companies, thus reducing the cost of internal and external investors and the information imbalance between managers and company owners, thereby improving business performance. However, when the listed company did it, a bad signal was delivered to the investors in capital, which cause the doubt about company, external investors prudently reducing their investments, which will have a negative performance to the listed companies. Thus,if the listed companies do not disclosure internal control deficiencies,strengthening the disclosure of internal control information will generate a positive operating results.While the listed companies do disclosure,negative effects come into being. Currently a large number of domestic and foreign empirical studies focus on the internal control information disclosure status, influence factors, the related influence to company performance, but most empirical researches above are set in the the assumption of internal control under the Voluntary Disclosure, and the few scholars study the theme through distinguishing disclosure and internal control deficiencies.At present, most countries have adopted the legislation of internal control, which force the listed companies in the capital market to disclose relevant information.However, whether the conclusions of the study are still right in the forced phase?Based on this, this article is divided into six parts:Part I is an introduction to explain the significance of this study topics from reality and policy background, and put forward the research ideas and methods of this paper. Part II is the literature review, which contains collating relevant research literature of home and abroad, summarizing their researches and carrying out relevant comments and the possible innovation of this article. Part III is the theoretical basis. This part interprets the concept of internal control disclosure and corporate business performance and analyzes the internal control information disclosure by the information asymmetry theory, principal-agent theory, signaling theory and the efficient market theory, then coming up with the following hypotheses. Part IV is to build internal control information disclosure index starting with the three indicators the authenticity, integrity and timeliness,and use of analytic hierarchy process measure each indicator, consisting of a formula to calculate internal control information disclosure index. Part V is the empirical research design, which contains the selection of sample and variable, and the results of empirical analysis. Part VI is the conclusion and prospect.In this part, conclusions are made according to the results of regressions and relative policy advices are put forward on the basis of research conclusions. Besides, the innovation points and shortcoming of the study are also pointed at last.This paper finds that when a listed company with no reporting internal control deficiencies strengthen to disclose internal control information of the company,it will quickly transfer good signal,reduce information asymmetry between internal and external and attract investment, thus generating positive operating results; while listed companies with reporting internal control deficiencies strengthen to disclose related information, a bad signal is passed. The conclusion of the article can provide a more comprehensive and effective way to how to produce a better operating performance under the mandatory disclosure, namely, strengthening an internal control information disclosure system.