내부회계관리제도 취약점 보고와 대리인 문제

Internal Accounting Control System(IACS) is one of the methods and procedures a company uses to ensure the accuracy and validity of its financial reports. Management is responsible for developing and maintaining effective internal control system. If the companies disclose the internal control weakness, management will have incentives to increase their personal utilities and gains. Therefore we can guess that the agency problem has the positive relationship with the internal control weakness. The objective of this study is to examine the relationship between the internal control weakness and the agency problem. The results are as follow. First. reporting on internal control weakness is significantly positively associated with the agency problem. Second, the agency problem of internal control weakness firms decreases when the large shareholder's equity holdings increase. This result implies that agency problem declines as the ownership increases, so, it has the negative association with the internal control weakness. Third, we find that the group whose proxy of the agency problem bigger than zero shows the significantly positive relationship with the internal control weakness. This study has a contribution in that it provides first the relationship between the internal control weakness and agency problem.