The Influence Of Corporate Governance On The Disclosure Of Internal Control Deficiencies

As the continuous development of economic globalization,a series of financial fraud cases are constantly exposed.Among them,there is no lack of world energy giant Enron Corporation,the biggest bankruptcy company throughout American history WorldCom and our Yinguangxia,Zhengbaiwen,Lantian and so on.In order to restore investor's confidence in the capital market,American government issues Sarbanes-Oxley Act which states the specific request for enterprise disclosure internal control evaluation report in article 302 and 404.Later,our state five ministries successively promulgate Basic Norms of Internal Control and Supporting Guidelines of Internal Control,which means the internal control has been really valued as the significant measures for perfecting business finance,healthily developing governance structure and protecting investor's profits,meanwhile,it helps us a lot to study internal control deficiencies disclosure.A large number of researches suggest that the lack of perfect and complete corporate governance structure is the root of enterprise internal control failure while the internal control deficiencies is the mark of the failure.Therefore,from the perspective of corporate governance structure,empirically tests the impact of corporate governance structure on the disclosure of internal control deficiencies and its severity.Choosing Shenzhen main board and small & medium enterprise board listed companies data from 2012 to 2015 as the research samples,the paper uses the approach of combining normative study with empirical study and builds models through reference carding and theoretical reviewing to empirically test corporate governance structure effect on internal control deficiencies disclosure.There are six parts in total.Part one is an introduction which introduces the research background and significance,research content and framework,and research method and innovation.Part two is the literature review that sorts the domestic and oversea literatures in regard to internal control defect and corporate governance structure.Part three is the theoretical basis which introduces the related conception and elaborates the involved theories as well.Part four is the statistical analysis of current situation for the internal control information disclosure.Part five is empirical analysis that verifies corporate governance structure influence on internal control deficiencies disclosure by means of descriptive statistics,correlation analysis,group inspection and regression analysis.Part six is the research conclusions and suggestions.In this part,regarding to the research result,the writer puts forward the suggestions for optimizing corporate governance structure to further perfect internal control system,and points out the research limitations and prospects.The conclusions are follows:ownership balancing degree,ownership concentration,the members of the board directors shareholding,the members of the board of supervisors shareholding,integration of president and general manager,the proportion of management shareholding and the disclosure of internal control deficiencies is significant negative correlation;board of directors size and scale of board of supervisors and the disclosure of internal control deficiencies is significant positive correlation.Furthermore,analyzing the severity of the disclosure of internal control deficiencies,the paperconfirmed that the corporate governance structure has a significant effect on the disclosure of internal control deficiencies.In this paper,the writer breaks through the past research perspective of “defect existence equals to defect disclosure”,meanwhile,on the basis of past limitation on studying if discloses internal control deficiencies,the writer extends the discussion of the severity for disclosing internal control deficiencies.The result not only makes for listed companies to understand the important roles the corporate governance structure plays in internal control deficiencies disclosure process,but also benefits them to optimize corporate governance structure,then further to promote the internal control system to better play the roles.