Beyond Internal Control over Financial Reporting

<p>By examining two different modes of internal control and the fundamentals of risk management this book analyses the role of internal control in financing investment profit distribution and corporate strategies through China's experience. In doing so it confirms the effectiveness and superiority of internal control over operation and management.</p><p>The book compares the various internal control methods used in China and the USA namely operation and management-oriented versus financial reporting-oriented approaches. It also discusses the differences in corporate risk attitudes and behaviours under the two approaches. The author then proposes the hyper-correction hypothesis and the trimming hypothesis. Empirical findings regarding corporate cash policy mergers and acquisitions tax avoidance and diversification strategy reveal that internal control in China does not result in undue risk aversion but instead manages enterprise risk within a reasonable capacity. These results support the trimming hypothesis and demonstrate that internal control is a useful risk management tool.</p><p>The title will appeal to students academics and accounting professionals interested in internal control (risk management) accounting auditing and corporate finance regulation and governance.</p>