내부회계관리제도와 기업지배구조: 주식소유구조와 이사회 특성 중심으로

This study investigates the relationship between internal control over financial reporting and corporate governance focusing on ownership and board of directors' characteristics. The effects of corporate governance on disclosure of material weaknesses were tested in internal controls over financial reporting, using samples from companies listed on KOSPI and KOSDAQ between 2006 and 2007. Logistic regression was performed to test the effects of ownership and board of directors' characteristics on disclosure of the material weaknesses in internal controls over financial reporting. In the analysis of full samples (model 3), manager-controlled firms, in which the controlling owner was not the CEO, showed significantly more material weaknesses than owner-controlled firms, in which the controlling owner was the CEO. Moreover, in the variables of board of directors, board sizes of 6～8 persons and over 9 persons were significantly positively related to material weaknesses, and the activity and financial expertise of outside directors in a board of directors were negatively related to material weaknesses. An additional analysis was performed on firms which were matched in size across the year and industry to solve the problem of difference in the sample size between ICD firms and non-ICD firms. The additional analysis of matched samples (model 6) showed that while the signs of variables did not change, the statistical significance of the variables showed variances. In the variables of ownership, manager-controlled firms in which the controlling owner was not the CEO disclosed significantly more material weaknesses than owner-controlled firms in which the controlling owner was the CEO. In the variables of board of directors, the activity and financial expertise of outside directors were negatively related to material weaknesses. In control variables (model 3), firm size, profitability and operating cash flow were negatively related to material weaknesses, and closeness to debt covenant constraints and auditor size were positively related to material weaknesses. In the result of matched firms (model 6), control variables showed the same significance as that of the full samples, except for profitability. Additionally, the effects of ownership ratio of the controlling owner and the CEO on disclosure of material weaknesses in internal controls over financial reporting were tested. As a result of additional testing (model 8), it was found that controlling owner's ownership ratio was significantly negatively related to material weaknesses, and CEO's ownership was positively related to material weaknesses, although it was not statistically significant. Finally, the effects of the number of blockholders on disclosure of material weaknesses in internal controls over financial reporting were test. As a result, it was found that the number of blockholders was negatively related to material weaknesses, though not statistically significant.