Research On Material Weakness Disclosure Of Internal Control Of Listed Banks

There are high risks in the operation of the bank,and the internal control mechanism is the basis for the bank to judge,identify and manage risks,establish relevant rules and regulations,and implement relevant procedures and methods.The establishment of the internal control mechanism by the bank can correct improper behaviors within the bank,ensure the normal operation of the bank’s management and ensure the safety of assets.Internal control is the "immune system" of banks,and the information of internal control defects is often one of the important contents in the information publicly disclosed by banks.The US Public Company Accounting Oversight Board(PCAOB),a product of the Sarbanes Act after the Enron scandal,proposed the concept of "material weakness" in auditing standards.The disclosure of material weakness information can make the internal control vulnerabilities found by managers,optimize and improve the internal control,and then improve the quality of accounting information.However,China’s research on this material weakness,which can affect the execution effect of the internal control of listed banks,is still in the exploratory stage,and the policy guidance on the disclosure of material weakness has not been improved,which makes banks unable to accurately identify,evaluate and disclose the material weakness in the internal control systematically.However,if the "material weakness" exists in the internal control system of the bank,it will make the listed bank unable to protect itself from the impact of internal and external risks,and thus unable to guarantee the normal operation of the bank and the failure of external supervision.Shanghai Pudong Development Bank Co.,LTD.(hereinafter referred to as: Shanghai Pudong Development Bank)as an example to study the disclosure of substantive vulnerabilities in the internal control of listed banks,firstly analyzes the disclosure status of internal control of Shanghai Pudong Development Bank,and then analyzes the disclosure status of substantive vulnerabilities of Shanghai Pudong Development Bank from multiple perspectives.It is found that the factors affecting the disclosure of material vulnerabilities by banks mainly include the importance and willingness of banks to the disclosure of material vulnerabilities,the lack of unified standards for the disclosure of material vulnerabilities by listed banks,insufficient external supervision and insufficient demand from external users.In order to strengthen the effectiveness of internal control of listed banks in our country,it is necessary to improve the disclosure of material vulnerabilities of listed banks,perfect the disclosure mechanism of material vulnerabilities of internal control of listed banks,strengthen external supervision and guide external users to effectively use information to improve the disclosure of material vulnerabilities of internal control of listed banks.