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Mandatory internal control audit and corporate financialization

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  • Chen, Qianqian
  • Chen, Zhi

Abstract

This paper empirically examines the impact of mandatory internal control auditing systems on the financialization of enterprises based on China's A-share listed companies from 2007 to 2021 using a difference-in-differences model for empirical analysis. The findings indicate that mandatory internal control auditing has an inhibitory effect on corporate financialization. The heterogeneity analysis reveals that the mandatory internal control auditing system has a more significant inhibitory effect on the degree of financialization of non-state-owned enterprises, enterprises in the eastern region, and enterprises in the region with weaker financial regulation.

Suggested Citation

  • Chen, Qianqian & Chen, Zhi, 2024. "Mandatory internal control audit and corporate financialization," Finance Research Letters, Elsevier, vol. 62(PA).
    • Handle: RePEc:eee:finlet:v:62:y:2024:i:pa:s1544612324001156
    DOI: 10.1016/j.frl.2024.105085
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    References listed on IDEAS

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    Cited by:

    1. Jialin Yan & Haibo Hu & Yiruo Hu, 2024. "Does internal control improve enterprise environmental, social, and governance information disclosure? Evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(5), pages 4980-4994, September.

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