La regolamentazione europea richiede al management di comunicare informazioni sulle caratteristiche del sistema di controllo interno (SCI) implementato al fine di rassicurare gli investitori sulla sua effettiva ed efficace adozione. allo stesso tempo lascia margini di discrezionalità in materia di disclosure sul SCI. Utilizzando la teoria dell’agenzia, questo studio analizza la relazione tra la disclosure sui controlli interni, la qualità dell’informativa contabile ( earnings management ) e l’attività di monitoraggio del consiglio di amministrazione (CdA). L’analisi empirica, condotta su 85 società quotate, ha evidenziato una relazione diretta tra le informazioni diffuse sul SCI e la qualità dell’informativa contabile, e una relazione inversa tra la disclosure sul SCI e l’attività di monitoraggio del CdA.

THE RELATIONSHIP BETWEEN INTERNAL CONTROL SYSTEMS AND EARNINGS QUALITY. EVIDENCE FROM EUROPEAN COMPANIES#The European regulation recognizes the internal control system (ICS) as a fundamental element of effective governance and requires management to disclose information regarding its characteristics in order to inform investors. Nevertheless, the regulation leaves some discretion on the specific content of ICS disclosure. Within the frame of agency theory, we analyze the relationship between ICS disclosure, board monitoring and earnings quality.#Our empirical analysis focus on 85 companies listed in the four main European financial markets (Paris, Frankfurt, Milan and London) over the period 2003-2005. We find that there is a direct link between the ICS disclosure and earnings quality. Moreover, we find an inverse relationship between ICS disclosure and board monitoring, suggesting that these two governance mechanisms are substitute in addressing agency conflicts. Lastly, our analysis shows that board monitoring is also directly linked to earnings quality, thus the overall effect of board monitoring on disclosure is double and it takes into account the costs and benefits of disclosure.