The Impact Of Internal Control Weakness Heterogeneity On Corporate Performance Under The Background Of Mandatory Disclosure

Internal control is an important measure to improve management level and risk control capability for the company,and has always been the focus of national and social hot spots.Internal control has universal applicability,and all companies need it to ensure that business objectives and strategic objectives are achieved.However,internal control is unique,it has different characteristics and manifestations in different countries.Therefore,the theoretical study of internal control needs to be closely integrated with the institutional background.The Ministry of Finance and other five ministries jointly issued "basic norms of internal control" in 2008 and constituted the three supporting guidelines of internal control in 2010,then has formed a unified system of internal control norms in China.In 2012,the regulators began to require the board of listed companies to build internal control system and related information disclosure by batch.The internal control system requires the company to take into account the two internal control objectives of finance and management,and the Internal control is divided into two levels: financial report and non-financial report.They have different effects on internal control objectives,and also play a different role in the management.First of all,this paper has combed the existing literature and related theories,and provided literature support and theoretical basis for the following study.Secondly,on the basis of reviewing the background of our system,this paper analyzes the internal control weaknesses disclosed in the internal control self-evaluation report of listed companies,and verify the reliability of internal control weakness information.Thirdly,this paper puts forward the hypotheses about the relationship between internal control weaknesses and corporate performance in the context of the previous research,and chooses the main board listed companies in Shanghai and Shenzhen stock markets in 2012-2015 as empirical samples.Finally,the author draws the conclusions from the empirical research and puts forward the policy suggestions for the listed companies,the investors and the regulators.The following three conclusions are drawn from this paper.First,the listed company has internal control weaknesses,it will have a significant negative impact on corporate performance.Second,the negative impact caused by the significant weaknesses of non-financial reporting internal control is greater,and the negative effects caused by the major weaknesses of financial reporting internal control are relatively small.When there are two major internal control weaknesses,the greatest negative impact on corporate performance;financial reporting internal control and non-financial reporting of internal control general weaknesses on corporate performance will not have a significant negative impact.Fourth,the main board listed companies truly disclose internal control information,regulatory policy has achieved some success.This study has accumulated new empirical evidence on how the internal control weaknesses have affected corporate performance.It also provides guidance for the listed companies to improve the internal control construction and investors to pay close attention to the internal control information of listed companies.