Internal control risk disclosure, media coverage and stock price crash risk: Evidence from China

Jiajun Zhu, Xuetong Hu, Jing Gao and Hongping Tan

International Journal of Accounting Information Systems, 2024, vol. 55, issue C

Abstract: This study delves into the COSO framework to explore the impact of risk disclosure of internal control and media coverage on stock price crash risk. Our findings reveal that effective risk disclosure of internal control plays a crucial role in reducing a company’s stock price crash risk. Additionally, positive and negative media coverage exhibit contrasting effects on crash risk. Notably, the efficacy of internal risk governance significantly shapes the “Double-edged Sword” effect of media monitoring and ultimately influences stock prices. Finally, we uncover the mechanisms through which risk disclosure mitigates stock price crash risk. In summary, our research offers novel insights and practical recommendations for enhancing corporate governance practices.

Keywords: Internal control; Media coverage; Stock price crash risk; Disclosure; Information asymmetry (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijoais:v:55:y:2024:i:c:s1467089524000435

DOI: 10.1016/j.accinf.2024.100710

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