Internal Control Information Disclosure and Accounting Conservatism
|School||Beijing Jiaotong University|
|Keywords||mandatory internal control disclosure internal control weakness voluntary internal control disclosure accounting conservatism|
The companies listed on the main board of stock exchanges in China are mandated to carry out the "Implementation Guidelines for Enterprise Internal Control" from2012, mandatory disclosure of internal control information become a realty in China. A perfect internal control system plays a significant role in the maintaining corporate property safety, improving management level and economic efficiency. It is established to ensure a sustainable development for enterprise. Since disclosure of internal control information now becomes the focus of public attention, its key expression-internal control weakness has aroused lively discussion among academics and practitioners. Under the above circumstances, we will systematically analyze the economic effects of internal control weakness disclosure on accounting conservatism, the relationship between internal control quality and accounting conservatism in voluntary disclosure times. Based on theoretical analyses and empirical tests, we obtain conclusions as below:(1) Internal control weakness have reversed effect on accounting conservatism.(2) Enterprise that have disclosureinternal control attestation report, which represent high quality of internal control, have a higher accounting conservatism than those have not.This article will be of great value in providing new empirical evidence for academia to study internal control, providing evidence for implementation results of internal control system, providing suggestions for policy-makers to improve internal control standards, providing theoretical references for enterprises to enhance internal control efficiency, and providing new perspectives to research mandatory internal control disclosure.