The Mandated Internal Control Audit Policy And EarningsManagement

Influenced by the SOX act and a series of domestic economic events,China promulgated a series of supporting guidelines such as the Basic Norms of Enterprise Internal Control and the Supporting Guidelines for Internal Control,which require the audit of the effectiveness of interna l control.In order to explore the effect of mandatory internal control policy,this paper tries to test the impact of the policy on two kinds of earnings management behavior of three types of mainboard listed companies.First,the domestic and foreign research on the internal control,the relationship between internal control and earnings management and the relationship between audit of internal control and the quality of accounting information is reviewed and summarized.On this basis,this paper describes why the mandatory internal control audit policy is conducive to inhibit the earnings management behaviors of enterprises using the principal-agent theory and signaling theory.Then,this paper further analyzes the influence of mandatory internal control audit on accrual earnings management behavior and real earnings management behavior,and designs the model based on the DID model.I select the 2011-2014 year main-board listed companies as the research object and use the DID model for empirical analysis respectively from the overall and sub-batch angles.The conclusions of this study are:(1)mandatory internal control audit policy can effective l y restrain the accrual earnings management behavior;(2)inhibition of mandatory internal control audit policy on the real earnings management behavior is not obvious;(3)mandatory interna l control audit policy can effectively restrain the state-holding enterprises' accrual earnings management and real earnings management behavior,but the inhibitory effect on the real earnings management behavior is not significant.Based on the above conclusions,this paper mainly puts forward the following suggestions for policy-making institutions:(1)expand the scope of mandatory internal control audit;(2)further improve and refine the detailed rules of interna l control.The main innovations of this paper are as follows:(1)in the research content,we have refined the policy effect of mandatory internal control audit policy on two types of earnings manageme nt of different types of enterprises,and further widened the depth of related research.The existing research in our country focuses more on the impact of policies on all listed companies,few studies further refine its influence;(2)in the research method,this paper respectively studied the effects of the policy on its object according to batch based on the DID model,so you can know the effects of the policy on specific object more accurately.The existing research is always the general study,and the policy is seldom studied in batch.