Can Media Supervision Improve the Quality of the Firms Internal Control

Using the sample of firms listed in China Growth Enterprise Market (GEM) from 2011 to 2015 we empirically test the effect of media coverage on the corporate internal control quality and the quality of internal control information disclosure. We found that the higher the degree of media coverage would lead to higher quality of internal control and information disclosure. The empirical results of this paper indicate that media can act as an important external supervision mechanism besides of state laws and regulations to regulate the behavior of corporate internal control, to protect the interests of investors, and to enhance investors’ confidence.