A Research Of Corporate Governance, External Supervision And The Disclosure Of Internal Defects

After the 20 th century,the whole world have exposed famous companies financial scandal.All this financial fraud cases have give us a shock,but at the same time we must think about that why this things may happen. Get to the bottom behind these cases, the effectiveness of internal control of listed companies caused by the intimate concern.After the Enron,in order to regain the confidence of investors,the American government enacted the Sarbanes- Oxley Act. The Act mandatory requires listed companies to disclose internal control information, and it also requires that the external audit institutions must give opinion about the internal control self-Assessment Report released by the management of the company.After that, the PCAOB gives similar provisions about this.Although,China started late about concern for the internal control information disclosure,but by a long time research about this,we also set a series of internal control norms.In 2006,the Shanghai and Shenzhen Stock Exchanges were released Guidelines for Internal Control of Listed Companies, which requested the Board to deal with internal control be considered in the assessment and the formation of internal control self-assessment report, the certified public accountant to conduct an annual audit company financial reporting internal controls issued by the evaluations.2008,five ministries and commissions of the Ministry of Finance, the Securities and Futures Commission, the Audit Commission,the CBRC and CIRC jointly issued the "internal control norms", released in 2010 five ministries' internal controls supporting the Guidelines, so far China has basically to form a complete set of internal control system of norms. As the introduction of a series of policies, people pay more and more attention to the establishment of internal control and information disclosure of the internal control system of enterprise. Indeed, the perfect internal control system is essential for the long-term development of an enterprise, which provides a good basis for the internal environment of enterprise daily business activity.In view of the fact that the disclosure of internal control information, especially the disclosure of internal control deficiencies has gradually become a hot topic, so this paper selects the 2011-2013 board in Shenzhen A shares of listing Corporation as the object of study, discusses the external supervision, corporate governance impact on the internal control deficiencies disclosure. This paper consists of the following parts.First of all, this paper gives a simple description of the research background, and introduces the main research methods and innovation. After reading a lot of domestic and foreign literatures, this paper systematically and classification of the literature, and then reviews the literature.Secondly, this paper introduces the related theories about the internal control and the internal control deficiencies disclosure, mainly related to the principal-agent theory, signaling theory, efficient market theory and so on. After the introduction to the related theories, this paper made statistics on the disclosure of internal control deficiencies disclosure of listing Corporation in China, and description of the problem existing in this.Then, this paper examines the relationship between the external supervision, the corporate governance and the disclosure of internal control deficiencies through the empirical.In this part, this paper puts forward 7 hypotheses, constructs two models. The first model mainly measures the relationship between corporate governance and disclosure of internal control deficiencies. The second model use the external supervision as a moderating variable to test the moderating effect to the disclosure of internal control deficiencies.The empirical results show that, the proportion of the first shareholder, the proportion of state-owned shares, the proportion of independent directors, the executive compensation and the size of the supervisors board all has a obvious positive effect on the disclosure of internal control deficiencies.But the CEO duality have significant negative impact on the disclosure of internal control deficiencies. At the same time, through the empirical, we also confirmed that the external supervision regulation for the disclosure of the internal control deficiencies, which proved the variable exists between the conduction mechanism.Finally, combining the conclusion of the empirical part, the corresponding countermeasures and suggestions are put forward to increase the external supervision and improving the corporate governance structure, we hope that listing Corporation can further improve the mechanism for the disclosure of the internal control system and internal control deficiencies.