Internal Control,Accounting Information Quality And Corporate Idiosyncratic Risk

Preventing systemic financial risk is our government's unswerving determination,and the idiosyncratic risk of listed companies has become the focus of more and more investors to improve investment returns.In the stage of risk management-oriented internal control construction,the relationship between internal control and internal and external risks is inextricably linked.Based on the viewpoints of "Stock Price Information Content Theory" and "Noise Deal theory",and combined with the relevant theoretical results of information asymmetry and corporate governance,this paper builds a theoretical bridge between corporate internal control and the idiosyncratic risk.We empirically test the governance mechanism of listed companies through internal control construction to improve the quality of accounting information and reduce the idiosyncratic risk of capital market from inside to outside.On the one hand,the theoretical analysis of this paper shows that in the stage of risk management-oriented internal control construction,corporate internal control is an important measure to prevent the transmission of internal trait elements becoming the volatility of enterprise capital market characteristics.Whether it is "Stock Price Information Content Theory" or "Noise Deal theory",it shows that the root of idiosyncratic risk is the uncertainty of public information quality.Therefore,to improve the quality of accounting information,we should start from its own authenticity and accuracy,as well as the timely disclosure of norms and other aspects,all which will be audited and supervised by the internal control system.Therefore,a perfect internal control system can not only improve the quality of accounting information accruals and reduce earnings manipulation,but also improve the quality of accounting information disclosure and enhance the financial transparency of enterprises,thus reducing the degree of information uncertainty of external investors and alleviating the idiosyncratic risk of the company in the capital market.On the other hand,based on the time node of the implementation of internal control in China and the change cycle of financial market,this paper chooses the A-share non-financial listed companies of Shenzhen Stock Exchange from 2008 to 2017 as the research sample.Empirical results show as follows.There is a significant negative correlation between corporate internal control and idiosyncratic risk in the whole sample regression analysis.The higher the quality of internal control is,the lower the level of corporate specific risk is.Internal control is negatively correlated with the accrued quality of accounting information,while positively correlated with the quality of accounting information disclosure.This shows that the higher the quality of internal control is,the lower the degree of accounting earnings manipulation is,and the more true the quality of accounting information is.At the same time,the higher the quality of internal control is,the timelier and perfect the disclosure of accounting information will be.However,in terms of mediating effect,the result is opposite.The accrual quality of accounting information does not show a significant mediating effect in regression equation,while the quality of accounting information disclosure has a significant mediating effect,and it is a complete mediating effect.In the further grouping regression results,we also found that accounting information accrual quality showed significant partial mediating effect in the GEM market,non-single market target companies and positive earnings management company samples,while accounting information disclosure quality still showed complete mediating effect in all groups.Moreover,the above-mentioned mediating transmission mechanisms are more effective than other groups in the sample of GEM and non-single market target companies and positive earnings management companies.The results of this study enrich the relevant research results of internal control and internal and external governance mechanisms,and provide theoretical and empirical basis for companies to stabilize the performance of external capital markets through internal management.At the same time,this study also has theoretical and practical guiding significance for scholars and financial workers.