Research On The Impact Of Internal Control Deficiencies Disclosure On Corporate Value

As the main organization of the modern social and economic activities,the enterprises directly participate in and affect all aspects of social life,and they are also the main tools of creating social wealth.The fundamental purpose of the companies’ continuous operation is to create value as much as possible.Maximizing corporate value is the ultimate goal of business operation and development.Internal control is embedded in the entire enterprise operation,and it is complementary to corporate governance in the whole business operation.The disclosure of internal control deficiencies is an essential part of the enterprise’s internal control construction,which is of certain significance to reduce the risk of enterprise management and ensure the healthy operation of the enterprise.The emergence or existence of internal control deficiencies can not only affect the normal operation of enterprises,but also make the value of enterprises greatly reduced in the long run.In the past,the academic circles rarely divided the disclosure of internal control deficiencies into voluntary and mandatory two stages according to the changes in the institutional environment,and compared the relationship with the corporate value.Therefore,on the basis of previous scholars’ research,this paper then compares the two stages of internal control deficiencies disclosure to analyze the impact on the corporate value,discuss whether the nature of property rights will affect the research content,and further explore whether the rectification of internal control deficiencies will affect the corporate value.This paper first introduces the background and significance of the topic,and then reviews the research status of internal control deficiencies disclosure and internal control deficiencies disclosure affecting the value of enterprises,and summarizes the results and shortcomings of the present research.Then we will sort out the research framework and innovation points,laying the foundation for further research.Secondly,the research content is defined accordingly,and the theory of principal-agent theory,information asymmetry theory,value management theory and attribution theory are used as the theoretical basis,and the research hypothesis is put forward.Then the research variables are defined and four basic multiple regression models are built with using the Shanghai and Shenzhen A stock listed companies from 2007 to 2016 as research samples.The descriptive statistics,the correlation analysis of the combination of Spearman and Pearson are used to test the hypothesis,and then the multiple regression method is used to carry out the empirical study.Testing the robustness of the empirical results,and finally the following conclusions are drawn:(1)Internal control deficiencies disclosure will reduce the corporate value;(2)Compared with voluntary disclosure stage,the disclosure of internal control deficiencies in the compulsory disclosure stage is more obvious to the negative impact of the corporate value;(3)Compared with non-state-owned enterprises,the negative correlation between the internal control deficiencies disclosure of state-owned enterprises and corporate value is more obvious;(4)The rectification of internal control deficiencies disclosure has no significant positive effect on corporate value.Then combined with the disclosure status,the following suggestions are put forward from the government and the enterprise perspective:(1)Standardizing specific internal control deficiencies disclosure standards,improving the level of internal control information construction;(2)Increasing the punishment of internal control deficiencies and concealment of disclosure,legislation to ensure the healthy operation of the capital market;(3)Promoting the depth of state-owned enterprises,at the same time,we should pay high attention to the internal control quality of non-state-owned enterprises;(4)Strengthening the concept of enterprises to disclose internal control deficiencies proactively,and taking rectification measures actively;(5)Improving the training system of internal control personnel,strengthening internal supervision and management,and point out the limitations and improvements of this article.