Abstract Using unique survey data to measure corporate integrity, we examine the relation between corporate integrity and internal control quality. The results show that corporate integrity is significantly and negatively associated with internal control weaknesses. We find a substitution effect between informal and formal institutions for improving internal control quality. In other words, the negative association between corporate integrity and internal control weaknesses is more significant when the legal development or market competition is weaker. Furthermore, we find that more effective corporate governance can strengthen the relation between corporate integrity and internal control quality. These findings indicate that corporate integrity can improve the quality of internal control. Our findings also provide empirical evidence for the construction of stronger internal controls.

中文翻译：

---

公司诚信会改善内部控制的质量吗？

摘要利用独特的调查数据衡量企业诚信度，我们考察了企业诚信度与内部控制质量之间的关系。结果表明，企业诚信与内部控制弱点有显着负相关。我们发现非正式和正式机构之间的替代效应可提高内部控制质量。换句话说，当法律发展或市场竞争较弱时，公司诚信与内部控制弱点之间的负相关性就更加明显。此外，我们发现更有效的公司治理可以加强公司诚信与内部控制质量之间的关系。这些发现表明，企业诚信可以提高内部控制的质量。