Research On The Correlation Between Quality Of Internal Control Information Disclosure And Earnings Management

The listing corporations in China guarantee the maximization of their own interests, in order that the use of earnings management to adjust or control the enterprise accounting earnings information is very common. This behavior undoubtedly has a serious impact on the behavior of investors. If the quality of internal control information disclosure can be used to estimate the degree of earnings management, it will help optimize the investment behavior of the investors.This paper is based on the research of internal control information disclosure quality of earnings management and try to solve the following problems: Can the internal control information disclosure quality effectively reflect the extent of earnings management of listed companies? Does the disclosure of internal control of the company mean that the company has a lower earnings management level? Is there a possibility of higher earnings management in the presence of major internal control deficiencies? Is the company’s earnings management level of voluntary disclosure of internal control information relatively low? Does disclosure of internal control information imply that there is a relatively low level of earnings management?Based on the previous studies, this paper defines the core concepts and verifies the hypothesis through different theories. In the process of empirical research, this paper selects 2012-2013 all Shanghai A-share listed companies as a sample with using accounting earnings management as the explained variable and with using internal control validity, internal control defect types, internal control information disclosure mandatory and internal control information disclosure detailed strategic as explanatory variables and with using affect the other accounting earnings financial data as the control variable construction regression model, to test the reflection of each factor on earnings management. We found that, companies with a higher quality information of disclosure of internal control have a lower degree of earnings management. Companies with an effective internal control from accouting firms have a lower degree of earnings management. Companies with internal control defects have higher ones. Companies with a voluntary information disclosure have a lower degree of earnings management. However through whether the internal control information disclosure is circumstantial can not reflect the degree of earnings management. Finally, this paper puts forward the corresponding countermeasures and suggestions on the conclusions of empirical research.