The Factors Related To Reporting Internal Control Deficiencies For Listed Companies

From the worldwide, due to the low quality of internal control of the listed company, financial fraud scandals or even bankruptcy cases occur frequently, governments specialized for the internal control information disclosure promulgated and implemented a number of laws and regulations, we still need to study the focus topic of internal control weaknesses disclosure. Our country in 2011, gradually full implement the basic norms of corporate internal control and its supporting guidelines, which marks Chinese internal control information disclosure from the voluntary phase into the mandatory phase. After entering the compulsory stage, it is not only mandatory disclosure of internal control information in a reasonable manner, and requires enterprises to carry out internal audit. Of course, the internal control audit information and internal control information disclosure contained in the internal control information has become the focus of the theory and practice field.In this paper, the formation of our country’s internal control system is a good opportunity, from two aspects:internal and external characteristics, we study the influence factors of listed companies to disclose internal control defects in our country, to help investors effective decision-making, listed companies improve the internal control mechanism and is helpful to for regulators to targeted regulation. This paper will be based on the low quality of the internal control of a group of listed companies’data research, based on the influencing factors of listed companies to disclose internal control defect analysis in detail.The research content of this paper can be divided into two parts:theoretical analysis and empirical research.In the part of theoretical analysis, the first part of this artical to the third part, in clearly defined in this paper, we study the concepts of internal control and internal control defects after, and the related literature at home and abroad are classified on the basis of combing, combined with the principal-agent theory, asymmetric information theory and the theory of signal transmission system analysis, put forward the possible impact on the listed companies to disclose internal control defects of factors, to carry out research in this paper provide theoretical support and assumptions.In the empirical research part, namely the fourth to sixth part, based on the theoretical analysis put forward the hypothesis of this study:company size is greater, the proportion of independent directors is higher, the scale of the supervisors is larger and the growth of companies is higher, the company is more likely to disclose the internal control deficiencies, and it has positive correlation; The ownership of the company and the size of external auditing institutions will impact the disclosure of internal control deficiencies, but its direction and significant subject to further inspection. In China 2011-2013, low quality of internal control of listed companies as research samples, the standards of the low quality of internal control (conforms to one that was selected as a sample) are as follows:in the daily operation of listed companies or their own inspection activities, they found internal control defects (contains general defects, important defects, major defects), the board of directors or the management formulate the corrective actions for these defects, and in the self assessment report of internal control was disclosed; because of the existence of irregularities, by the Commission, the stock exchange punishment or investigation; CPA issued a non-standard audit opinions of listed companies, including the unqualified items, emphasize reservations, negative opinion and disclaimer of opinion or the restatement of finance; during the period of 2011-2013, net profit is negative for the listed companies. After determining the research sample, this paper makes a descriptive analysis, correlation analysis, multiple regression analysis and robust test of the above hypothesis. Results show that:the size of the company, the growth of company, independent director proportion, and the internal control deficiencies disclosure is positively correlated; And nature of the ownership belongs to state-owned enterprises tend to disclose its internal control defects; The size of the board of supervisors and external audit institution size on disclosure of internal control defects has no significant effect.This article through to the multiple factors that affect listed companies to disclose internal control defects through theoretical analysis and empirical research, we not only pay attention to the basic situation of the internal control of listed companies, pay more attention to its loopholes and defects existing in the internal control. The disclosure of internal control defects will help the stakeholders to understand the internal control of listed companies, and to evaluate the benefits and risks after the investment decisions; Also easier to find the defects of internal control, internal management and improve internal control, continuously improve the efficiency of management, in order to realize the management goal. Therefore, the study of internal control information disclosure of listed companies, especially studies the disclosure of internal control defects, has important significance.