Research On The Market Reaction To The Information Disclosure Of Internal Control

The “Sarbanes-Oxley Act” was promulgated in 2002 in the United States,and internal control has been widely concerned.In 2008,the Ministry of Finance and other five parts jointly issued the “Basic Norms of Internal Control”,and in 2010 promulgated three supporting guidelines,which together constitute the internal control standard system of Listed Companies in China.The implementation of internal control standard system means that the disclosure of internal control information in China has turned to mandatory disclosure.Because of the late start of the research on market reaction of internal control information disclosure by Chinese scholars,although a series of phased research results have been achieved,there are still divergent academic views.In this context,it is of great significance to study the disclosure of internal control information and market reaction.Based on the theories of efficient market theory,information asymmetry theory,principal-agent theory and signal transmission theory,this paper combines literature review,normative analysis and empirical analysis to analyze the current situation of internal control information disclosure,and summarizes the theoretical basis and mechanism of market reaction of internal control information disclosure.By sorting out and summarizing the relevant literature of domestic and foreign scholars on the market reaction of internal control information disclosure,and according to the existing research results,this paper puts forward the hypothesis of this study.This paper takes Shanghai A-share listed companies in 2017 as the research object,and empirically examines the market reaction of internal control information disclosure combined with event study method.The research finds that the disclosure of internal control information has information content,and the detailed disclosure and simple disclosure of internal control have different effects on the stock price.Detailed disclosure has a significant positive impact on the stock price;There are differences between companies disclosing internal control flaws and companies not disclosing internal control flaws on stock prices.Disclosing information about internal control flaws has significant negative market reaction.Finally,according to the results of basic analysis and empirical analysis,some suggestions are put forward to promote the healthy development of China's capital market.