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

Since the1990’s, with the development of securities market, the earningsmanagement problem has brought to the attention of the academic accounting in ourcountry. Many empirical or normative research literatures about earnings managementhave sprung up, which has obtained certain research results. Earnings managementbehavior of enterprise directly related to the actual reliability of accounting information,related to the direct economic benefits of enterprise stakeholders. Therefore, in order tothe long-term development of the enterprise，improving the effective internal controlsystem is the effective measure to improve the enterprise internal management level,standardize the business activities of enterprises and ensure the reliability of financialstatements.In our country, internal control information has been in a state of voluntarydisclosure. Since January1,2011, domestic and overseas coinstantaneous listedcompanies took the lead in implementation of the enterprise internal control systemshows that China’s regulators began to require disclosure of internal control informationfrom voluntary to compulsory. In view of this, the thesis based on the domestic andoverseas listed companies as research samples, through the empirical analysis on thecorrelation between disclosure of internal control information and earnings managementto promote the other listed companies (in addition to domestic and overseas listedcompanies)strengthening the internal control information disclosure, to providepowerful basis on curbing the abuse of earnings management behavior, at the same time,which is used to test the execution of the relevant laws and regulations to internalcontrol in our country, further improve the internal control system in our country andput forward the targeted and practical advice. The research of internal controlinformation disclosure and earnings management is not only enriching the accountingtheoretical research in this aspect, but also providing theory basis for relevant laws andregulations to continuously regulate earnings management of listed companies andperfect the internal control in our country.In addition, It has practical effects oninspecting the implementation of the existing relevant laws and regulations of internalcontrol in our country.At first, this thesis uses the descriptive statistics analysis method to do descriptivestatistics about present situation in our country of the disclosure of internal controlinformation and earnings management of domestic and overseas coinstantaneous listed companies, And then use the empirical research method, using modified Jones modelseparation can be handling accrued profits as a measure index of the degree of earningsmanagement of listed companies at the same time, the relevant control variables,introduced at the same time, build the regression model of disclosure of internal controlinformation and earnings management, and the correlation test and regression analysis.Result shows that, in our country, the effect about implementing the mandatoryprovisions of internal control information disclosure is good. According to the result ofthe descriptive statistics analysis, the level of the information disclosure of internalcontrol in the companies which listed in domestic and overseas has improvedsignificantly. However, disclosure of internal control information is lack of unified form,content, detail, etc. In addition, according to the empirical result, there is significantnegative correlation relationship between disclosure of internal control information andearnings management and the disclosure of internal control information can effectivelyinhibit earnings management behavior of enterprise.