Research Article
An Entropy Testing Model Research on the Quality of Internal Control and Accounting Conservatism: Empirical Evidence from the Financial Companies of China from 2007 to 2011
Table 3
Indicator system for the index of the internal control quality2.
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(a) The types of internal control assurance report: Given the extent that the internal control assurance report guarantees, there’s a big difference in assurance targets, evidence collection, requirements of the assurance reports, responsibility of accountingfirms and so on Liu [21]. This article specifies three situations: when firms provide internal control audit reports, it is seen as reasonable assurance; providing other types of internal control assurance reports is seen as limited assurance, and providing no internal control assurance reports or only the examination report of internal control from its sponsors is seen as no or low guarantee. (b) The levels of detail for internal control information: According to Yang and Wang [22], we divide the level of detail for internal control information into five levels. |