Based on the monitoring effect of creditors, this paper examines the relevance between group's internal capital market and cash holdings. We find that the groups have become the economic pillar organization in China, but groups' internal capital markets generally exist the inefficient phenomena. We further find that the group's members on average have more cash holdings than independent companies and the moderating effect of bank debt's intervention can strengthen the negative relevance between internal capital market and cash holdings. Our findings suggest that groups should follow the pace of economic reform to enhance efficiency of internal capital market and reduce cash holdings by the way of appropriate bank debt.

The laws and regulations issued by our government, to a certain extent, ensure the authenticity and completeness of the internal control information of listed companies. And promote the listed companies developing and implementing a sound and effective internal control system, thus avoiding the occurrence of fraud. From the angle of game, the disclosure of internal control information is a process of game between stakeholders. In this context, we construct an incomplete information dynamic game model of listed companies, certified public accountants and regulators and solve it by backward induction method. Several suggestions are provided for regulating the internal control information disclosure of listed companies.

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