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

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  • Jian Cao
  • Bin Lin
  • Gennaro Bernile
  • Wei Shu

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.

Suggested Citation

  • Jian Cao & Bin Lin & Gennaro Bernile & Wei Shu, 2023. "The economic effects of mandated ICFR disclosure in China: an insider perspective," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 30(3), pages 707-725, May.
    • Handle: RePEc:taf:raaexx:v:30:y:2023:i:3:p:707-725
    DOI: 10.1080/16081625.2021.2020666
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