The Economic Consequences Of The Quality Of Internal Control Information Disclosure Of Listed Companies

In November 2001, the world known accounting scandal, Enron was found a huge accounting fraud, resulting an instantaneously damaged to its global image; In May 2002, Worldcom was found to cover the deteriorating financial conditions by using false accounting information, masking profits to manipulate the stock price, which eventually led to bankruptcy. These financial frauds have brought serious consequences, which help the society understanding internal control is not only a requirement, but also the key of the enterprise management. However, the internal control of Chinese listed companies still exist many problems. On one hand, the format of internal control information disclosure is not standard, the disclosure of internal control defects are not completed with poor availability; On the other hand, the standards of differences as well as the auditing quality of certified public accountants also need to be improved. Therefore, it can be seen that the issues of the internal control information disclosure quality needs more in-depth study. This paper exams the economic consequences of internal control information disclosure of listed company quality, by evaluating internal control information disclosure quality, understanding the current situation of internal control information disclosure, the motivating listed companies, by encouraging them to improve the level of information disclosure of internal control; Besides, this paper will analyze the economic consequences of internal control information empirically, so as to provide useful information to related information users.Research sample includes Shenzhen main-board A-share listed from 2012 to 2014. Using entropy measurement of listed company internal control evaluation index, evaluate of the current situation of internal control information disclosure quality, and the internal control evaluation index for the degree of differentiation inspection and effectiveness. Based on the results, I conclude that the overall quality of internal control of listed companies during the sample period is low, but in general, the internal control quality is improving year by year. At the same time, the quality of internal control for firms with fictitious profits, inflated assets, false statements or material omissions and other violations by the CSRC or firms which special treated by stock exchange is significantly below matched samples; Firms audited by "big four" or with unqualified opinion report have higher quality of internal control information; This paper also investigates the economic consequences of internal control information disclosure of listed company, from the perspective of internal management and external investor respectively to study the effects of internal control information disclosure quality on cost of debt capital and firm value. Through descriptive analysis, correlation analysis and regression analysis, the empirical results show that:internal control of listed company information disclosure quality and cost of debt capital have a significant negative correlation relationship; The quality of internal control information disclosure of listed companies and enterprise value have significant positive correlation.