An Empirical Analysis between Internal Control Disclosure Level and Enterprise Value in the Real Estate Industry

Internal control disclosure (ICD) becomes more and more important for Chinese enterprises, especially for real estate enterprises. Previous literature is lacking for empirical research for the ICD - enterprise value relationship. This paper divided the internal control disclosure level into three dimensions, including: perfection, transparency and quality. In addition, we formulated a composite evaluation index system for internal control disclosure perfection. Using 150 samples from real estate industry in 2010 and 2011, this paper empirically validated the relationship between internal control disclosure level and enterprise value. Also, we take corporate governance control variables into consideration. The result indicated a positive relationship between internal control disclosure level and firm value. We finished by providing advice for the development of the real estate industry based on internal control disclosure policy.