Research On The Information Content Of The Listed Companies' Internal Control Defects Disclosure

Since January 1,2012,the Ministry of Finance of the People's Republic of China has issued the "Circular on Implementing the Internal Control Regulation System for Classified Listed Companies on Main Boards in 2012”.From then on,the internal control information of listed companies on the The "Evaluation Report" voluntarily disclosed the "Internal Control Audit Report" and changed it to mandatory disclosure both of them.The research on the information content of existing internal control defect disclosure mainly focuses on the period of voluntary disclosure of the " internal control audit report".After that,the information content of disclosure of internal control defects is less researched and controversial.In the context of the implementation of this policy,this article summarizes the status quo and inadequacies of the study on the content of internal control defect disclosure information,and selects listed companies on the Shanghai and Shenzhen Stock Exchange Boards for five consecutive years from 2012 to 2016 as research samples,using a normative study.In combination with the empirical research method,firstly,after the implementation of the mandatory disclosure policy,the disclosure of internal control defects is signaled through the medium of identified violations.Re-use event research methods to study the market response to the disclosure of internal control defects after the implementation of the mandatory disclosure policy.The specific research conclusions are as follows:(1)The disclosure of internal control defects is significantly related to the identified violations,which conveys negative signals.(2)Disclosure of internal control defects,and the market does not necessarily have negative reactions.(3)The market response to internal control deficiencies is not obvious.It is not because the investor's risk perception level is low and the information content of internal control deficiencies cannot be identified.On the contrary,investors can judge the content of internal control defects disclosure.If the disclosure of internal control defects conveys new information that investors did not perceive before,then the market will react negatively immediately.The research in this paper can provide some suggestions for the policy department,help the policy department to formulate a clear disclosure framework for internal control defects,further standardize the company's internal control information disclosure behavior,further standardize the CPA practice behavior,and enable investors to more fully understand Listed company.