A Study Of How The Disclosure Of Listed Companies Internal Management Flaw Influences The Financing Cost

Since entering the new century, with the development of economic globalization and the Internet technology, there are many accounting scandals and financial fraud events in country and abroad, including international famous companies’ financial fraud events such as Enron’s, which leads the bad influence to the global economy, and decreases the confidence of investments by stakeholders, and this is fully exposed the question that the disaster for the reason that the internal part is out of control. Research value of this article is based on the analysis of our country enterprise internal control problems of information disclosure, reveals the main factors influencing the enterprise financing costs, hope through the study of the relationship between provide certain reference for the development of capital market in China, so as to improve the investment relationship, promote the healthy development of the market order.We use the standard research and empirical research methods to explore the relationships in this paper. First, on the basis of the relevant literature analysis, this paper reviews the economic consequences of deficiencies in internal control factors and the resulting disclosures; then introduces the basic concepts of the theory of the relationship between the definition and both internal controls and the cost of financing base; then make four basic assumptions of this article, and by choosing Shanghai a-share listed companies as the study sample, the cost of equity capital in order to calculate the PEG model than the cost of capital and debt interest costs and total financial liabilities calculated as being the end of explanatory variables to the internal control reporting companies to disclose whether there are deficiencies in internal control,the type of deficiencies in internal control were assumed as explanatory variables, the company’s growth, systemic risk, financial risk, company size, business risk,profitability, operating capabilities, inventory levels, interest coverage ratio for the control variables, empirical research on the relationship between the two; Finally, the conclusions drawn from the analysis in this paper: first, to disclose internal control deficiencies lead to increased cost of equity financing; second, internal control deficiencies disclosure would lead to increased debt financing costs; third, to disclose internal control deficiencies affect the higher the degree, the higher the cost of equity capital; fourth, the higher the degree of influence of internal disclosure controldeficiencies.The innovation of this paper lies in the following aspects:(1) the use of earnings per share forecast of analysts to determine the cost of equity capital, making the cost of equity capital calculation more in line with market reality;(2) to the company’s growth,solvency, profitability as the control variable regression model to 2012--2014 listed companies as sample data, analyze the impact of information disclosure deficiencies in internal control financing costs.(3) the internal control in accordance with the severity of the defect information is divided into different types, to further explore the effect of deficiencies in internal control type of cost of capital.(4) the disclosure of internal control weaknesses study provides financing costs for the company listed on the cost of capital the new perspective proposed a capital cost reduction of non-financial enterprises pathway has important significance.