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Actual Controller, Market Agglomeration and Voluntary Internal Control Attestation Report
Author(s): 
Pages: 22-27+96
Year: Issue:  8
Journal: Xi'an Finance

Keyword:  internal control informationvoluntary internal control attestationmarket agglomerationactual controller;
Abstract: Whether the companies will voluntarily disclosure the Internal Control Attestation Report not only depends on actual controller traits of the company itself but also on the degree of the market agglomeration. In the market with a relatively high degree of market agglomeration, enterprises have a closer interdependent relationship, therefore, under such a situation, they need to trade off between adequate disclosure of the financial information in order to attract outside investors and appropriate disclosure of the financial information to avoid business information leakage. Because of the good signaling effect, enterprises prefer to voluntarily disclosing the Internal Control Attestation Report, which has become one of the important means for enterprises to acquire competitive advantages.The paper firstly constructs the basic theoretical model of the relationship among the actual controller, market agglomeration and voluntary internal control attestation report by taking 694 listed companies’ internal control attestation reports in Shanghai Stock Exchanges from 2010 to 2011 as research objects. The results show that the disclosure of internal control reports has a significantly reversed U relationship with the market agglomeration. When the degree of the market agglomeration increases,private enterprises prefer to voluntarily disclosing the internal control attestation report to acquire competitive advantages.
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