Does Disclosure of Internal Control Deficiencies and its Repair Contribute to the Promotion of Enterprise Value?

Abstract

The internal control of listed companies may have defects in the process of operation, and Information disclosure is the process of information transformation and transmission among different interest groups, or it can be understood as the process of information reprocessing and value appreciation. So the research on the disclosure of internal control deficiencies and repair can promote the construction of enterprise internal control system and disclosure of high quality internal control information. Thus this paper takes A-share listed companies in Shanghai and Shenzhen stock markets as the research object, which disclose internal control self-assessment report in the 2015-2016 years, using double T test and regression analysis to verify the disclosure of internal control deficiencies and repair will enhance the value of the company or not. The results show that investors are more concerned about the opinions of the third parties rather than the information disclosed by the enterprises, thus affecting the value of the enterprise. And find that the restoration of internal control deficiencies, especially major / important defects repair, which can't enhance the value of the enterprise, and will reduce the value of enterprises in the year. Due to the endogeneity of enterprise internal control and the delay of signal, repair defects in long-term economic impact on the enterprise value is more worthy of attention.