The Relationship Between Internal Control Quality, Ownership Type, and Earnings Management: The Moderation of the COVID-19 Pandemic

Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i2.3976

Yanyan Zhang, Luyue Yao, Xiaoyuan Xu

Zhejiang Sci-Tech University, Hangzhou 310000, Zhejiang, China

Abstract

This paper examines the relationship between internal control and corporate earnings management using Chinese A-share listed companies from 2013 to 2023 as research subjects, while investigating the moderation of the pandemic factor. Furthermore, it introduces ownership nature to explore whether the relationship between internal control and earnings management, as well as the pandemic"s moderating effect, varies across enterprises with different ownership structures. The findings reveal that effective internal control can reduce the level of corporate earnings management, with the pandemic strengthening this relationship. And the relationships are influenced by corporate ownership nature. Internal control in non-state-owned enterprises demonstrates greater effectiveness in curbing earnings management behaviors.

Keywords

internal control, ownership nature, earnings management, COVID-19 Pandemic

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