Взаимосвязь раскрытия корпоративной социальной ответственности и эффективности внутреннего контроля: данные китайских публичных компаний

Chinese enterprises are integrating with the international market while completing the transition from planned economy to market economy. However, the pursuit of profit maximization by enterprises and the lack of supervision have led to a series of incidents that endanger the safety and interests of the public. In recent years, under the guidance of the Chinese government, corporate social responsibility (CSR) has gradually attracted the attention of enterprises and the society. In order to enhance the supervision on the fulfillment of CSR, the Chinese government has formulated the Basic Norms of Enterprise Internal Control that based on the internal control framework released by COSO, which clearly defines the internal control requirements of CSR. Different from the European and American internal control system, China’s internal control system is not only used to reasonably ensure the effectiveness of financial report internal control, but also extends to all levels of operation and management. Chinese government promotes the sustainable development of enterprises through the supervision of internal control and encourages enterprises to disclose independent CSR report.
The factors that determine and restrict CSR behavior include not only the differences in external governance mechanisms such as government intervention and marketization process, but also the management process of enterprises’ internal control. The internal control system has positive significance for enterprises in preventing risks, standardizing management, promoting sustainable development as well as promoting corporate to fulfill their CSR. (Li & Zheng, 2018) The internal control of CSR is an important part of internal control system. The Basic Norms of Enterprise Internal Control stipulate that the enterprise should establish the supervision process from production safety, product quality, environmental protection, resource conservation, promotion of employment, the rights and interests of workers and other aspects of the enterprise social responsibility internal control. The internal control system provides the management framework and guidance for enterprises to fulfill their social responsibilities.
As an important non-financial report, CSR disclosure is a way of communication between enterprises and stakeholders, as well as an integral part of information and communication
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elements in the internal control framework. CSR disclosure reveals the fulfillment of CSR of enterprise in some extent. Internal control can be used as the regulator of the quality of CSR disclosure, which has a significant positive adjustment effect on the quality of CSR disclosure. (Tang, 2016) Internal control and CSR disclosure alleviates the imbalance of corporate governance structure in some extent and further alleviates the lack of CSR to some extent.
With the increasing importance of CSR disclosure in corporate practice, independent empirical research on CSR disclosure has gradually become the focus of people’s attention. Some empirical study indicate that CSR disclosures are positively related to the firm financial performance (Chen et al., 2016) and firm value through higher profitability, growth, and sales per employee (Lins et al., 2017) as well as indirect link such as consumer awareness. (Servaes & Tamayo, 2013). The positive relationship between financial performance and CSR performance became stronger incentives for enterprise to reveal information on their social performance in order to improve their publicity. Meanwhile, the improvement of the quality of CSR disclosure has put forward higher requirements for enterprises in terms of corporate governance. Many scholars conduct the empirical studies from the corporate governance perspective, they examined board independence, and presence of audit committee (Khan, 2013) have positive significant impacts on CSR disclosures. Some scholars also examined the intellectual capital of the board (Berezinets et al., 2016), the casual effect of corporate governance and CSR. (Hoje et al., 2012).
Research Gap
Currently, researches on CSR disclosure mainly focus on the relationship of financial performance and corporate governance (higher decision-makers). However, the whole corporate operation system is closely related from the higher decision-making level to employees. There are few researches on the whole internal mechanism driven by CSR performance from the management system level. Especially under the context that Chinese enterprises adopt internal control as an overall management control system, the research related to the relationship of CSR disclosure and the effectiveness of internal control system need to be further explore.
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Research questions and aims of study
Research question: 1. How does internal control affect the Corporate Social Responsibility of the Company?
2. Whether the effective internal control will lead to high quality CSR disclosure in the company?
The main purpose of this thesis is to give the insight of the intricate relationship of internal control and the CSR, in order to see how does internal control affect the disclosure of CSR and examine with the empirical data from public companies of Chinese to see whether the effective internal control will lead to high quality of CSR disclosure or not.
Research design
In order to answer research questions, we will conduct the literature review to explore the theoretical background of CSR and the internal control framework, which support the possible link between CSR and internal control. Furthermore, five hypotheses are proposed based on the five objectives under the framework of China’s internal control, with the support of theories related to CSR, policy analysis, and the institutional background of China.
To test the developed hypothesis, the regression model is applied in SPSS with the data gathered from China’s official rating agencies on the sample of Chinese public companies. Data collected through RKS database, an authoritative third-party rating agency for CSR in China, and DBI database, an authoritative third-party data collection agency which focuses on risk management, internal control and internal audit.
Finally, the paper will analyze the impact of effectiveness internal control on the CSR disclosure based on the empirical study result and try to give the insight of the relationship of internal control and CSR disclosure.