The Research On The Impact Of The Quality Of Internal Control Information Disclosure On The Cost Of Equity Capital

Internal control has been always paid attention by managers and investors,constantly strengthened its position in the enterprise management. The development environment of listed companies in China had greatly changed with the continuous improvement of securities market, the public hope that they can get open and transparent information on internal control. At the same time, to improve the quality of internal control information disclosure of listed companies can improve the impact of information asymmetry, moreover, it can also have beneficial effects on the development of the securities market. This paper mainly study on the relationship of internal control information disclosure quality and the equity financing cost, and analyze the way to decrease the cost of equity financing, and thus to have a positive effect on improve the level of internal control of listed companies, improve the flow of resources in capital market. Accordingly, the quality of information disclosure of internal control research on the influence of the equity financing costs has a farreaching significance.At first, to understand the research question, the paper studied the related literature at home and abroad, namely the relation of internal control information disclosure quality and the cost of equity financing, then introducing the equity financing cost and quality of information disclosure of internal control's concept and its measuring methods. In the theoretical analysis part, this article explains the internal control of liquidity and risk information disclosure quality and cost of equity financing mainly from two angles of liquidity and risk.To build the internal control information disclosure quality evaluation model through the entropy weight method, and bring into the PEG model to calculate the equity financing cost of listed companies, adopt the Shenzhen stock exchange from2012 to 2014 a-share listed companies as research samples, analyzed the relationshipbetween quality of internal control information disclosure and equity financing cost,set the management risk, return on assets and financial leverage variables as control variables, through empirical analysis proved that there existed a correlation between the quality of internal control information disclosure of listed companies and the equity financing costs, the conclusion of this paper had been further proved as the robustness examination results were totally the same as the main test. Research proves that there exist a inverse correlation between the internal control information disclosure quality and cost of equity financing, the better the quality of internal control information disclosure of listed companies is, the lower the cost of equity financing is.Finally based on the findings, this paper puts forward several suggestions: the listed company should improve the quality of the disclosure of internal control information to reduce the cost of equity capital. By optimizing corporate governance mechanism and strengthen the company's awareness of disclosure of internal control information to improve the quality of internal control information disclosure. At the same time, the company and the relevant authority should establish a perfect information disclosure of internal control system.