Taking A-share listed companies in Shanghai and Shenzhen from 2009 to 2015 as a sample, this paper makes a research on the relationship between the analyst following, internal control deficiency and interaction influence on the institutional ownership based on the theory of signal transfer and the perspective of information preference. The result indicates that from the static and dynamic perspectives, the proportion of institutional investor shareholding is relatively low in companies with internal control deficiency, but in similar companies with more analysts tracking, the institutional investor shareholding is still high, analysts tracking can effectively weaken the negative effects of internal control deficiency to institutional investors. The internal and external information concerning the enterprise has different signal value and decision making for institutional investors in decision-making,namely,the investors have preference to decision-making cognition and information orientation. The signal value of analysts tracking is far beyond the impact of internal control deficiencies on institutional investor shareholdings.