A Study On The Effect That We Media Makes On The Market Reaction Of Internal Control Weakness Disclosure

The requirements about internal control information disclosure in the Sarbanes-Oxley Act and the Basic Norms of Internal Control can urge the companies to establish an effective internal control system and reduce the degree of information asymmetry between investors and listed companies.From the view of investors,checking the content of the internal control information disclosure can also test the effect of policy implementation in some extent.As the internal control weakness is an important part of internal control information,so if we test the market reaction after the disclosure of internal control weakness,it should be meaningful.According to The theory of Effective Market Hypothesis,the Information Asymmetry Theory and the Signal Transmission Theory,the disclosure of internal control weakness can defects some information,which means that it can act on the market.This view has been confirmed by a large number of scholars.However,some other scholars take the opposite viewpoint.They tested some information which is different from the internal control weakness and found that there wasn't relation between the internal control weakness information and the market reaction.The market reaction came from an effect of other information that was different from internal control weakness information.This discovery put a foundation for my study.In this new world of“we media”,information that comes from those media is also different from internal control weakness information.So whether the we media information can also makes an effect on the market is just the question that I want to study.Based on the analysis above,this dissertation studies in three levels.First,it tests that whether the disclosure of internal control weakness can reflect some other information,which means that whether the market can make some reaction after the disclosure of internal control weakness information.Second,it tests that whether the disclosure of information which comes from we media can reflect some new information.Because if the market has no reaction after the disclosure of the we media information,there is no meaning of this study about the relation between the internal control weakness informationand the we media information.Finally,based on the study above,this dissertation tries to establish a contact between the internal control weakness information and the we media information,and tests whether the contact exists.As all kinds of we media is similar,so this dissertation takes the micro-blog as a representative.In this dissertation,it uses the Event Study Method,takes the A-share listed companies in 2015 as research samples,and makes the CAR as research object.Then it uses the excess return model to calculate the CAR of each sample,and on the basis of these data,it takes T test and multiple regression analysis.From the results of T test,we can find that the CAR of those companies which disclose internal control weakness information is lower than the CAR of those which doesn't disclose internal control weakness information.It verifies a fact that the disclosure of internal control weakness can make the market has a negative reaction.And the CAR of those companies which have opened the micro-blog is higher than the CAR of those companies which haven't opened the micro-blog.This means that micro-blog information can have a positive effect on the market.During the companies that have disclosed internal control weakness information,the CAR of those companies which haven't opened the micro-blog is lower than the CAR of those companies which have opened the micro-blog.This means that micro-blog information has a positive effect on the market after the disclosure of internal control weakness information.From the results of multiple regression analysis,we can find that if it takes the micro-blog as a control variable,those companies which disclose internal control weakness information have lower CAR.But if it doesn't control this variable,we find that the CAR of those companies which disclose internal control weakness is not lower anymore.These research results verify the conclusion of this dissertation once again.