The Mediating Effect Of Management Capability On The Relationship Between Media Coverage And Remediation Of Internal Control Weaknesses

In order to raise the level of internal governance in an all-round way and strengthen the risk prevention capabilities of enterprises,under the active leadership of government departments,the internal control of listed companies in our country is in full swing.However,due to the lack of relevant experience and agency issues,internal control weaknesses have been widely criticized as a product of internal control construction or imperfect operation.China is in an emerging transition period,The legal mechanism is still not perfect,media supervision has become an important mechanism for protecting the interests of investors.It is necessary to study the relationship between media supervision and internal control weaknesses remediation.Through collating and analyzing relevant literature,it is found that there are few literatures on the path through which media supervision affects internal control weaknesses.This paper,based on the research paradigm of "media supervision-management behavior-enterprise economic consequences",takes into account the importance of management capability to internal control weaknesses identification and correction,this article hopes to bridge the media supervision and internal control weaknesses remediation,and thus clarifies the path of the media supervision to play the role of governance.It also provides new ideas for listed companies to modify internal control weaknesses.On the basis of principal-agent theory,information asymmetry theory,signal transmission theory,reputation theory and administrative organization intervention theory,the paper puts forward the basic hypothesis of the relationship between the three.Which are relations between the media supervision and the internal control weaknesses remediation,the media supervision and management capability,the media supervision and management capability and the internal control weaknesses remediation.Based on the data of listed companies that disclose internal control weaknesses in Shanghai and Shenzhen A shares from 2012 to 2015,the mediating effect analysis method is used to verify the relationship between media supervision and internal control weaknesses remediation,and the relationship between media supervision and management capability,so as to test the mediating effect of management capability.The study shows that media supervision is conducive to improving the internal control deficiencies of listed companies.Management capability plays an intermediary role in media supervision to promote the effect ofinternal control weaknesses remediation.On the basis of the above conclusions,this paper puts forward some policy recommendations for actively playing the role of media supervision and governance,improving relevant laws and regulations for internal control,and strengthening the construction of management capability.