Board independence, internal information environment教程.pdf

China Journal of Accounting Research 5 (2012) 145–161 Contents lists available at SciVerse ScienceDirect China Journal of Accounting Research journal homepage: www.else /locate/cjar Board independence, internal information environment and voluntary disclosure of auditors’ reports on internal controls Ye Sun a,b,⇑, Yang Yi a, Bin Lin a,c a School of Business, Sun Yat-sen University, China b Department of Accountancy, City University of Hong Kong, China c Center for Accounting, Finance and Institutions, Sun Yat-sen University, China A R T I C L E I N F O A B S T R A C T Article history: When there is high information asymmetry between directors and managers, Received 8 December 2011 independent directors do not have enough information to perform their func- Revised 20 May 2012 tions. Only when faced with a good internal information environment can such Accepted 29 May 2012 directors acquire enough information to provide advice and monitor managers, Available online 30 June 2012 and only under these conditions can increasing their proportion on the board effectively reduce agency problems, such as driving managers to disclose infor- JEL classification: mation to investors. Using a sample of Chinese listed firms that voluntarily dis- G30 close their auditors’ reports on internal controls from 2007 to 2009, this study K22 explores how the information acquisition costs of independent directors affect M41 their monitoring effectiveness b