Table 7 Description of variables
From: Voluntary disclosure of internal control and auditor’s attestation: evidence from China
Variable name | Description |
|---|---|
ICVD = | ICVD in Model 1 is set 1 if a firm discloses an IC self-assessment report, and zero otherwise. In Model 2 all non-disclosures are deleted. Then ICVD is set to 1 if a firm attains an auditor’s attestation on the IC self-assessment report, and zero otherwise. ICVD in Model 3 is categorized into three groups: ICVD0 represents firms with no IC self-assessment report at all, which serves as the benchmark; ICVD1 represents firms with only an IC self-assessment report; and ICVD2 represents firms with both an IC self-assessment report and an auditor’s attestation. Since ICVD0 is used as the benchmark, we replace ICVD with ICVD1 and set it equal to 1 if the firm is in the category of ICVD1, and zero otherwise. Similarly, we replace ICVD with ICVD2 and set it equal to 1 if the firm is in the category of ICVD2. |
SEO = | A dummy variable, which is equal to 1 if a firm makes seasoned equity offerings in the next fiscal year, and zero otherwise. |
FUND = | The number of tradable shares held by mutual-fund institutions among the ten largest shareholders, divided by total tradable shares at the end of year t. |
GOV = | A dummy variable, which is equal to 1 if the largest shareholder is the government (including both the central government and local governments), and zero otherwise. |
CENTRAL = | A dummy variable, which is equal to 1 if the largest shareholder is the central government, and zero otherwise. |
SIZE = | The natural logarithm of total assets at the end of year t. |
GROW = | The change in operating revenue from year t-1 to year t divided by operating revenue at year t-1. |
ROE = | Return on equity for year t. |
LEV = | Total liability divided by total assets. |
INDIR = | The ratio of the number of independent outside directors to total number of directors. |
CLIST = | A dummy variable, which is equal to 1 if a firm’s shares are cross-listed in the US in addition to SSE, and zero otherwise. |
BIG 4 = | A dummy variable, which is equal to 1 if a firm’s auditor is one of the big four accounting firms, and zero otherwise. |
INV = | Book value of inventory divided by total assets. |
AGE = | A firm’s age is measured as the number of years since it was listed on the SSE. |
IndustryMBR = | The median of market-to-book ratio for each industry. |