The Relation between earnings management and internal control information disclosure: Evidences from listed companies in China

Abstract

We conduct an empirical research to examine the relation between earnings management and the disclosure of internal control through setting up internal control information disclosure index (CIDI) and using 1090 firms that disclosed information about internal control in 2010. We find that firms with higher internal control information disclosure expose to lower level of earnings management. This result not only has examined the implementation effects of new internal control information disclosure system, helping build and improve related laws and regulations, but also has a referenced significance for the further restrain of earnings management, the improvement of realness and reliability of financial reporting and the stimulation of healthy development of the capital market. © Springer-Verlag Berlin Heidelberg 2013.