The Impact of SOE Privatisation on the Authenticity of Internal Control Information Disclosure: Evidence from Chinese A-Share Listed Firms

Privatisation of state-owned enterprises (SOEs) has increasingly shaped corporate governance practices. SOEs often face substantial fines for financial misconduct, yet their internal control self-assessment reports frequently conceal critical deficiencies. This study investigates how SOE privatisation affects the authenticity of internal control information disclosure (ICID). Using data from Chinese A-share listed SOEs between 2012 and 2023, sourced from the CSMAR database, we apply a logit regression model with robust standard errors. Results indicate that privatisation reduces ICID authenticity. Non-state shareholders appear to prioritise firm valuation over transparent reporting. These findings contribute to corporate governance research by clarifying privatisation’s impact on information disclosure quality. For practice, regulators and SOE managers should enhance oversight of non-state shareholders to improve reporting authenticity. Policymakers may consider refining the ICID framework to eliminate inauthentic self-assessments, thereby strengthening disclosure practices.

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