scholarly journals The Effects of Air Pollution on Firms’ Internal Control Quality: Evidence from China

2019 ◽  
Vol 11 (18) ◽  
pp. 5068 ◽  
Author(s):  
Siyi Liu ◽  
Daoguang Yang ◽  
Nian Liu ◽  
Xin Liu
Keyword(s):  
Air Pollution ◽  
Internal Control ◽  
Firm Value ◽  
Vital Role ◽  
New Era ◽  
Control Quality ◽  
Demographic Traits ◽  
The Board Of Directors ◽  
Institutional Costs

Research on the consequences of air pollution has tended to focus on the macro and environmental effects on human health, often ignoring micro effects. In this paper, we empirically investigate the micro-institutional costs of air pollution, and our results show that in China, firms’ internal control quality is significantly and negatively associated with the severity of air pollution in its home city and that the most significant effects of air pollutants are those of PM2.5 and SO2, confirming that air pollution incurs micro-institutional costs. We find that this effect varies depending on factors related to the environment, ownership structure, the demographic traits of the board of directors’ chairman, and employees. Further analysis indicates that air pollution can degrade the quality of accounting information, provoke agency problems, and lower firm value. This study reveals the micro-institutional costs of air pollution and identifies the mechanisms by which air pollution affects the quality of macroeconomic development. By so doing, this study enables China’s government and public to better its understanding of air pollution and recognize the value of the Blue-Sky Protection Campaign. This study also reinforces the importance of the transition toward a new economic mode based on “high-quality development,” which will play a vital role in China’s new era.

The Effect of SOX Internal Control Deficiencies and Their Remediation on Accrual Quality

2008 ◽  
Vol 83 (1) ◽  
pp. 217-250 ◽  
Author(s):  
Hollis Ashbaugh-Skaife ◽  
Daniel W. Collins ◽  
William R. Kinney ◽  
Ryan LaFond
Keyword(s):  
Internal Control ◽  
Strong Evidence ◽  
Control Problems ◽  
Cross Sectional ◽  
Accrual Quality ◽  
Control Quality ◽  
Internal Control Weaknesses ◽  
Abnormal Accruals ◽  
Internal Control Deficiencies

This paper investigates the effect of internal control deficiencies and their remediation on accrual quality. We first document that firms reporting internal control deficiencies have lower quality accruals as measured by accrual noise and absolute abnormal accruals relative to firms not reporting internal control problems. Second, we find that firms that report internal control deficiencies have significantly larger positive and larger negative abnormal accruals relative to control firms. This finding suggests internal control weaknesses are more likely to lead to unintentional errors that add noise to accruals than intentional misstatements that bias earnings upward. Third, we document that firms whose auditors confirm remediation of previously reported internal control deficiencies exhibit an increase in accrual quality relative to firms that do not remediate their control problems. Finally, we find firms that receive different internal control audit opinions in successive years exhibit changes in accrual quality consistent with changes in internal control quality. Collectively, our cross-sectional and intertemporal change tests provide strong evidence that the quality of internal control affects the quality of accruals.

scholarly journals Analysis of Competence and Independence of Internal Auditor on Internal Audit Quality

2020 ◽  
Vol 5 (2) ◽  
pp. 96-102
Author(s):  
Leriza Desitama Anggraini
Keyword(s):  
Board Of Directors ◽  
Internal Control ◽  
Audit Quality ◽  
Task Force ◽  
Internal Audit ◽  
Study Data ◽  
Internal Auditor ◽  
The Board Of Directors ◽  
Operational Activities

Research is conducted with the aim of analyzing competencies and independence affecting the quality of audits in the company. The company's extensive scope restricts management and the board of directors from conducting direct oversight of internal and external activities in each of the company's operational activities. Therefore, management and the board of directors need a task force tasked with overseeing and examining the company's operational activities in order to improve internal control effectively and efficiently. There are still many problems of independence among internal auditors to date due to the position of internal Auditor working for management or working for the company. Research is carried out with a quantitative approach and with descriptive methods. The design of the research is a case study. Data collection techniques are carried out by questionnaire method and document inspection. Based on the results of the study concluded there is an influence of competence and independence on the quality of internal audits.

scholarly journals Analysis of the Information Disclosure of Commercial Banks’ Internal Control

2017 ◽  
Vol 9 (5) ◽  
pp. 77
Author(s):  
Fangliang Huang ◽  
Jing Chen ◽  
Hui Ma ◽  
Qiaoping Hou
Keyword(s):  
Internal Control ◽  
Commercial Banks ◽  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Audit Committee ◽  
Positive Impact ◽  
Annual Reports ◽  
Control Information ◽  
The Board Of Directors

By adopting the content analysis approach, this paper selects the annual reports of 45 China’s commercial banks to analyze the influencing factors of internal control information disclosure. The quality of internal control information disclosure of listed banks tends to be better than non-listed banks. Our empirical study shows that the factors of the exchanges of the banks’ listing, the proportion of the number of independent directors in the board of directors, and the times of the audit committee meetings have a significant positive impact on the quality of internal control information disclosure of commercial banks. To improve the quality of the internal control information disclosure of commercial banks, we put forward such suggestions as amending the supervision system, reducing the listing threshold and creating opportunities for listing for small and medium sized commercial banks, developing voluntary disclosure incentive policies, and intensifying effective punishment measures against and misbehavior in the information disclosure.

scholarly journals Influence of financial indicators on earnings management behavior: evidence from Vietnamese commercial banks

2020 ◽  
Vol 15 (2) ◽  
pp. 167-176
Author(s):  
Tran Quoc Thinh ◽  
Tran Ngoc Anh Thu
Keyword(s):  
Earnings Management ◽  
Commercial Banks ◽  
Firm Value ◽  
Banking Sector ◽  
Vital Role ◽  
Least Square ◽  
Financial Indicators ◽  
Loan Loss ◽  
The Impact

The quality of financial disclosures is of great importance than ever, as Vietnam’s international economic integration has been accelerating recently. This issue is currently particularly worrying for the banking sector in Vietnam, as banks play a vital role in economic development. However, there is a growing concern that managers tend to manipulate financial information using earnings management techniques to meet analyst expectations and to enhance the firm value in the short term. Such behavior can lead to inappropriateness in the decision-making process of financial statement users, as well as impair firm value in the long term. Therefore, this study examines the impact of factors related to financial indicators on earnings management of Vietnamese commercial banks to give more insight into the issue. The data of this study was collected from a sample of 30 Vietnamese commercial banks during a 5-year period from 2015 to 2019. By using the Ordinary Least Square (OLS) regression method through Eviews 10.0, the findings revealed that financial leverage and loan loss provision have a positive and significant impact on earnings management. Also, bank size and profitability were negatively associated with earnings management. Based on these findings, in the context of Vietnam, the study proposed policy suggestions to improve the quality of accounting information and to assist users of financial statements in recognizing and restricting earnings management in commercial banks.

scholarly journals Product-market competition, internal control quality and audit opinions. Evidence from Chinese listed firms

2020 ◽  
Vol 23 (1) ◽  
pp. 102-112
Author(s):  
Ling Zhang ◽  
Wen Chen ◽  
WUN HONG SU
Keyword(s):  
Internal Control ◽  
Market Competition ◽  
Product Market ◽  
Product Market Competition ◽  
Certified Public Accountant ◽  
Listed Firms ◽  
Control Quality ◽  
Audit Opinions ◽  
Public Accountant

Sobre la base de los datos de las empresas que cotizan en los mercados bursátiles A de Shangai y Shenzhen entre 2007 y 2015, este estudio examina las relaciones entre la calidad del control interno, la competencia en el mercado de productos y las opiniones de auditoría. Los resultados empíricos revelan que (1) cuanto mejor sea la calidad del control interno de las empresas que cotizan en bolsa, más probable es que un contador público certificado emita una opinión sin modificaciones; (2) la competencia en el mercado de productos se asocia positivamente con las opiniones sin modificaciones; (3) la competencia en el mercado de productos debilita la relación positiva entre la calidad del control interno de las empresas que cotizan en bolsa y la probabilidad de que un contador público certificado emita una opinión sin modificaciones; y (4) el impacto significativo de la competencia en el mercado de productos sobre la relación entre el control interno de la calidad y las opiniones sin modificaciones sólo existe en las industrias no monopolísticas. Based on data on listed firms in the Shanghai and Shenzhen A-share stock markets from 2007 to 2015, this study examines the relations among the quality of internal control, product-market competition and audit opinions. The empirical results reveal that (1) the better the quality of the internal control of listed firms is, the more likely a certified public accountant will be to issue a unmodified opinion; (2) the product-market competition is positively associated with unmodified opinions; (3) the product-market competition weakens the positive relation between the quality of the internal control of listed firms and the likelihood that a unmodified opinion will be issued by a certified public accountant; and (4) the significant impact of product-market competition on the relation between internal control quality and unmodified opinions exists only in non-monopoly industries.

Going Too Far is as Bad as not Going Far enough: An Inverted U-shaped Relationship between Internal Control and Operational Efficiency

2021 ◽  
Author(s):  
Hanwen Chen ◽  
Ting Li ◽  
Chuancai Zhang
Keyword(s):  
Internal Control ◽  
Risk Taking ◽  
Optimal Level ◽  
Operational Efficiency ◽  
Internal Controls ◽  
Information Channel ◽  
Control Quality ◽  
Internal Management

In this study, we explore the inverted U-shaped association between internal control quality and firm operational efficiency. Although effective internal controls can facilitate and improve operational efficiency, excessive internal controls can negatively affect operational efficiency by (1) influencing management energy, attention, risk-taking, and innovation motivations; (2) hindering employees' creativity, enthusiasm, and trust. Our findings support the inverted U-shaped association. We further explore and prove the two channels through which internal controls affect firm operational efficiency: the "information channel" (the quality of internal management reports), and the "application channel" (the enforcement of internal controls). Additionally, we show that the inverted U-shaped association only exists in non-state-owned firms. We do not find significant association between internal control quality and operational efficiency in state-owned firms. Overall, this study suggests that firms should not only establish an optimal level of internal controls, but also enforce the internal controls effectively to achieve their intended goals.

scholarly journals THE EFFECT OF GOVERNANCE QUALITY AND EARNING MANAGEMENT WITH INTERNAL CONTROL AS MODERATING VARIABLE TOWARDS FIRM VALUE

2020 ◽  
Vol 1 (2) ◽  
pp. 192-200
Author(s):  
Mufidah Mufidah ◽  
Ira Febrianti ◽  
Masnun Masnun
Keyword(s):  
Corporate Governance ◽  
Statistical Analysis ◽  
Earnings Management ◽  
Internal Control ◽  
Firm Value ◽  
Real Earnings Management ◽  
Internal Control System ◽  
Quality Of Governance ◽  
Governance Quality

The purpose of this study is to analyze the influence of the quality of corporate governance, real earnings management on firm value and to analyze the influence of the quality of corporate governance with the internal control system as a moderating variable on firm value in companies included in the LQ 45 index 2016-2018. The data in this study used descriptive statistical analysis and inferential statistical analysis. The results showed that the Quality of Governance had no significant effect on Firm Value, Earnings Management had a significant effect on Firm Value and Internal Control could not moderate the effect of Governance Quality on Firm Value.

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