Management Cognitive Bias And Internal Control Disclosure Quality

Information economics emphasizes that access to information plays an important role in economic society.Whoever can obtain more information and understand more information can occupy a dominant position in the market.As one of the impo rtant information disclosed by listed companies,internal control information of listed companies is undoubtedly what stakeholders want.As a reflection of internal control,internal control information disclosure is an important information acquisition ch annel for outsiders to observe internal corporate governance.The quality of internal control information disclosure has a positive correlation with the quality of internal control,and the effectiveness of internal control improves the quality of informat ion disclosure in the capital market.However,the daily operation of the company is in the hands of the management who is at the core of power,and the attitude of the management plays a key role in the first two.However,the traditional economic hypothe sis is not compatible with the real world.As the main operators of a company,the management are not completely rational people,but there are various cognitive biases.Therefore,it is of great practical significance to study internal control and interna l control information disclosure from the perspective of cognitive bias.In this paper,based on this starting point,through the analysis of the research results of listed companies in Hunan province,tries to clarify the cognitive deviation,internal control and internal control information disclosure between inner link,formed a "cognitive biases,first of all,the negative impact of internal control effectiveness,the influence that the internal control information disclosure quality" of the preliminary conclusion.Based on the logic of behavioral science and theories of bounded rationality,echelon,signal transmission and principal-agent,this paper deduces the logical chain of "cognitive intervention in behavior,and behavior affects discl osure".On this basis,this paper sorted out the research data of internal control of listed companies in Hunan Province,established the internal control and internal control information disclosure evaluation system according to relevant documents and pap ers,and selected the overconfidence evaluation index to analyze the research data.It is found that the quality of internal control and the quality of internal control information disclosure of listed companies in Hunan province are uneven and the phenomenon of overconfidence exists in listed companies in Hunan Province.This phenomenon is consistent with the logical deduction made in this paper.The cognitive bias of overconfidence affects the rationality of the design and effectiveness of internal contro l,and the effect of internal control cannot be guaranteed,so that the form quality,content quality and delivery quality of internal control information disclosure quality are affected by cognitive bias.In view of this phenomenon,this paper puts forward three suggestions to listed companies in Hunan Province.Firstly,based on the result that the quality of supervision elements in the internal control of listed companies is not high highlighted in the evaluation system,this paper puts forward suggestions to strengthen the supervision mechanism,and tries to avoid the "short board effect" of internal control.Secondly,this paper argues that listed companies should properly establish long-term learning mechanism to promote management’s investment in human capital and keep management’s thinking open and active.Finally,this paper puts forward suggestions on the establishment of long-term incentive mechanism to avoid the "performance-only" theory and urge the management to attach importance to internal con trol and internal control information disclosure and make decisions based on the long-term value of the company.Although the samples in this paper only represent Hunan province,it is hoped that this study can provide positive measures and countermeasures for the improvement of the quality of disclosure of senior executives’ supervision and internal control of listed companies in the future.