The economic effects of mandated ICFR disclosure in China: an insider perspective

Jian Cao, Bin Lin, Gennaro Bernile and Wei Shu

Asia-Pacific Journal of Accounting & Economics, 2023, vol. 30, issue 3, 707-725

Abstract: Using a survey of corporate insiders from 1,148 Chinese listed firms, this paper examines the direct effects of compliance with mandated Internal Control over Financial Reporting (ICFR) disclosure. In contrast with their U.S. counterparts, vast majorities of respondents recognize compliance benefits and perceive these benefits to outweigh the costs. However, the degree to which the firm is susceptible to market forces is a major determinant of the effects of compliance. The paper shows the evidence which supports the idea that the effectiveness of mandated ICFR disclosure depends crucially on the broader market and institutional environment in which firms operate.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:taf:raaexx:v:30:y:2023:i:3:p:707-725

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DOI: 10.1080/16081625.2021.2020666

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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