Financial Violations Research Articles

ANTI-CORRUPTION AUDIT OF COMPANIES AND FORESIGHT ANALYSIS IN TERMS OF THE STATE'S EUROPEAN INTEGRATION ECONOMIC POLICY

The article examines the current problems of spreading corruption in Ukraine. It has been established that corruption is a negative socio-economic phenomenon that restrains the state's economic development, reduces trust in the authorities and complicates the fight against Russia's military aggression. The coming years will be indicative for Ukraine's international partners in the context of assessing the effectiveness of national anti-corruption policy, and the degree of implementation of planned anti-corruption reforms, which will indicate the level of integration of European values into society and Ukraine's readiness to become a full member of the EU. The perception of the main corruption problems by the public and business was analyzed, and it was established that the general attitude of Ukraine towards corruption is shifting towards intolerance of this negative phenomenon. Based on the analysis of the dynamics of detected financial violations by the State Audit Service of Ukraine in the region for 2019-2023, the TOP-3 conditional regions that are prone to violations, including corruption, have been determined. A trend analysis of the volume of financial violations was carried out, which proved the average annual changes in the volume of the number of accrued violations for the years 2019-2023 and allowed us to make a forecast for 2026. The results of the foresight analysis show that the volume of financial violations in 2026 may reach the level of UAH 68,956.5 thousand. Accounting criminal and administrative violations by types of corruption during 2019-2023 were studied. The structural analysis of violations for 2019-2022 shows that the top three corruption methods included: an offer, a promise or the granting of an undue advantage to an official (21,9%); failure to take appropriate measures to combat corruption crimes (15,7%); declaring false information (12,8%). The analysis confirmed the significance of anti-corruption audits of companies and the formation of an anti-corruption independent audit system.

Efficiency of state financial control: approaches to evaluation and conditions of increase

Unresolved problems of the development of state financial control slows down the positive impact of the socio-economic development of the country. In the conditions of martial law and a shortage of financial resources, impeccable state financial control acquires the characteristics of one of the main guarantors of the effective and transparent use of international financial aid. The efficiency of the DFC becomes the main indicator of effective management of public finances. The article examines approaches to the assessment of the effectiveness of DFC. It was established that the reduction of the volume of financial violations depends on a group of factors: the effectiveness of the control measure, the effectiveness of the state financial control body; the quality of the evidence base, which should be a factor of irreversible action in matters of compensation for material damage caused to the state; completeness of implementation of recommendations on elimination of established violations and prevention of their occurrence in the future; the level of professional competence of managers of public sector entities in the implementation of control powers. It was determined that the desired efficiency of the DFC depends on the quality of its legal, methodological and praxeological support. Achieving a significant impact on the indicators of the state sector of the national economy can also take place thanks to the improvement of the qualifications of managers of state sector entities.

The influence of supplier financial violations on clients' environmental, social, and governance performance: Evidence from China's manufacturing industry

AbstractThe antecedents of environmental, social, and governance (ESG) performance have been extensively studied, yet the impact of supplier behavior has been overlooked. By analyzing data from China's manufacturing industry (2013–2020), we find that suppliers' financial violations enhance the overall ESG performance of client firms, with state ownership further reinforcing this relationship. By further examining the ESG dimensions, our study reveals an asynchronous pattern in firms' performance enhancements. Specifically, supplier financial violations significantly boost client firms' social and governance performance, while state ownership attenuates the positive relationship between supplier financial violations and governance performance. Ultimately, our study establishes a crucial link between the conduct of stakeholders within the supply chain and the firm ESG performance. Our findings also facilitate a more comprehensive assessment of the risks associated with supplier financial violations, aiding decision‐makers in shaping and implementing ESG‐related strategies for firms.

Burial objects” or “Birds of a feather”: The contagion effect of financial violations in business groups——The evidence from China

This study explores the conagion effect of financial violations within Chinese business groups from 2012 to 2021. Findings reveal that violations lead to stock price declines in member companies, with contagion primarily driven by irrational investor sentiment (“burial objects”) over the short term. The financial and governance characteristics of infected companies deteriorate (“birds of a feather”), but do not impact their long-term stock returns. Mitigating investor irrationality in infected companies helps curb contagion. This research contributes to business group governance and risk contagion theories, revealing a unique irrational contagion channel of financial violations within business groups in emerging markets.

A comparative review of financial corruption prevention strategies in the republic of Iraq

Corruption is a systemic issue that impacts every aspect of human activity with financial violations and corruption. It stands among the most crucial of issues which due to its historical roots, has expanded in our societies. Administrative and financial corruption is an unlawful action carried out by a group of employees. It manifests wherever it can and takes various forms such as bribery, fraud, cheating, complicity in government tasks entrusted to government employees, and abuse of influence in departments. This problem occurs in both developing and developed countries. When countries deviate from religious and moral values, lack effective anti-corruption laws, and also grapple with weak governments and regimes unable to enforce anti-corruption mechanisms or when they face severe economic crises such as wars or imposed economic pressure, corruption flourishes. This undermines political legitimacy, exacerbates poverty, and leads to economic and political instability. By misusing and illegally benefiting from authority, influence, and public resources for personal enrichment, administrative and financial corruption leads to illegal actions by officials and violates fundamental human rights. Therefore, financial corruption impacts the economic and social structures of both developing and developed countries in the same manner. This article aims to address this question: What are the methods that can be employed to prevent corruption, and its examples in the legal frameworks of Iraq? The current research employed a descriptive-analytical approach. The information was gathered through specialized books and articles in this field, laws, regulations, ongoing plans and bills, and international documents.

Financial Oversight of The Implementation of The Annual Sub -Budget Appropriations for Iraqi Diplomatic Missions and Representations

The importance of the study lied in two aspects, one scientific and the other practical. In the scientific aspect, the researched worked to enrich scientific research in the field of financial control over the activity of Iraqi diplomatic missions and representations, and raising the subject of studying diplomatic missions and representations in its various aspects. As for the practical aspect, the study addressed the various aspects of financial control over the implementation of financial control over the annual subsidiary budget of Iraqi diplomatic missions and representations, the responsibilities of the supervisory bodies to uncover financial violations, and the role of the administrative bodies concerned with holding accountable those who exceed financial allocations and deterring them. The study aimed to clarify the mechanisms by which financial control is carried out on the implementation of the annual sub-budget appropriations of the Iraqi diplomatic missions and representations, to avoid serious financial deviations and violations that lead to obstructing the work of the diplomatic missions and representations from performing their role in a manner consistent with the tasks and duties entrusted to them, and to attempt to alert the competent authorities responsible for diplomatic activity to the importance of financial control, and to grant broader powers and authorities to the oversight bodies to improve the effectiveness and performance of the Iraqi diplomatic missions and representations. The problem of the study was represented in the multiplicity of oversight bodies on the implementation of the annual sub-budget appropriations of the Iraqi diplomatic missions and representations, represented by parliamentary oversight and the oversight of the independent bodies, in addition to the oversight of the Audit and Internal Oversight Department in the Ministry of Foreign Affairs. The multiplicity of oversight bodies leads to an overlap in the oversight powers of these bodies, which negatively affects the implementation of the annual sub-budget appropriations of the Iraqi diplomatic missions and representations. The scientific methodology that the researcher relied on to complete this study is the analytical method, which aimed to analyze the legal texts issued to organize the mechanisms of disposing of public funds and methods of monitoring them, supported by analyzing the correspondence of the Iraqi Ministry of Foreign Affairs to diplomatic missions and representations to complete the benefit. The researcher decided to divide it into two sections, and allocated the first section to the concept of financial control, which included defining financial control and explaining its importance and the objectives sought from practicing it, while in the second section , this study addressed the types of financial control, which included the types of control in terms of their connection to work and purpose, the types of control in terms of the subject, the types of control in terms of the party that practices it, and the types of control in terms of the time of its practice.

Integration of the mechanism of digital economic forensics into the enterprise management system

The article examines the issue of introducing economic forensics tools into the enterprise management system in the emergence of a digital economy. Economic forensics has a great potential for use to ensure the economic security of enterprises by detecting, preventing and eliminating the consequences of economic and financial violations, but its mass implementation is hindered by the large expenditure of time and resources required by traditional forensics. It is argued that the implementation of economic forensics in the format of an information system using modern information technologies, in particular artificial intelligence, blockchain and machine learning, will allow the integration of economic forensics tools into the practice of enterprise management. The mechanism of digital economic forensics has been formalized as a system that combines the internal relationship and the order of processes and procedures, as well as their methodical, organizational, informational, legal and resource support, the functioning of which is aimed at increasing the economic security of enterprises based on forensics tools and the use of digital technologies. The mechanism is implemented as a sequence of stages of information collection and analysis, detection of risks / suspicious actions, response within the enterprise (with subsequent monitoring of the implementation) or complaints to law enforcement agencies. At each stage, appropriate departments are involved and appropriate digital tools are used, in particular to identify suspicious actions and transactions by comparing them with a database of similar actions from past periods. The advantages of the proposed mechanism include ensuring a systematic collection and analysis of information on economic transactions that may pose risks for the economic security of the enterprise; automated detection of risks and provision of warnings to the management of the enterprise; the possibility of preventing losses or compensating them in the early stages; the ability to resolve a crisis situation without recourse to law enforcement agencies and bearing the corresponding costs and damage to reputation; constant improvement of the quality of risk detection and classification by means of using artificial intelligence tools. All this together may increase the economic security of enterprises.

Oversight of financial violations in light of digital transformations

In the era of the digital revolution, the methods of financial violations that constitute an attack on public funds are changing, which places a burden on the supreme audit institutions. They must be aware of the existence of challenges that constitute an obstacle in the practice of traditional oversight, which necessitates a gradual shift towards the use of modern techniques in review and auditing that are compatible with that information revolution, which is an eye. What the Central Auditing Organization of the Arab Republic of Egypt seeks to achieve The research revealed, with its results, the connection between the digital revolution and the inevitability of improving the oversight process to develop reliable digital evidence proving the occurrence of financial violations, and then prosecuting corruption to protect public funds. It concluded with recommending the inevitability of working to intensify the provision of legislative, material, and professional capabilities that support the work of members of the oversight body

Enterprise violation risk deduction combining generative AI and event evolution graph

AbstractIn the current realms of scientific research and commercial applications, the risk inference of regulatory violations by publicly listed enterprises has attracted considerable attention. However, there are some problems in the existing research on the deduction and prediction of violation risk of listed enterprises, such as the lack of analysis of the causal logic association between violation events, the low interpretability and effectiveness of the deduction and the lack of training data. To solve these problems, we propose a framework for enterprise violation risk deduction based on generative AI and event evolution graphs. First, the generative AI technology was used to generate a new text summary of the lengthy and complex enterprise violation announcement to realize a concise overview of the violation matters. Second, by fine‐tuning the generative AI model, an event entity and causality extraction framework based on automated data augmentation are proposed, and the UIE (Unified Structure Generation for Universal Information Extraction) event entity extraction model is used to create the event entity extraction for listed enterprises ‘violations. Then, a causality extraction model CDDP‐GAT (Event Causality Extraction Based on Chinese Dictionary and Dependency Parsing of GAT) is proposed. This model aims to identify and analyse the causal links between corporate breaches, thereby deepening the understanding of the event logic. Then, the merger of similar events was realized, and the causal correlation weights between enterprise violation‐related events were evaluated. Finally, the listed enterprise's violation risk event evolution graph was constructed, and the enterprise violation risk deduction was carried out to form an expert system of financial violations. The deduction results show that the method can effectively reveal signs of enterprise violations and adverse consequences.

대학의 고등교육법 위반사항에 대한 의미연결망 분석

The purpose of this study is to analyze violations of the Higher Education Act by universities, as identified through the internal audits conducted by the Ministry of Education, using semantic network analysis methods. The data analyzed were disclosures related to violations of the Higher Education Act from 2017 to 2022, based on the audit disposition date. Universities with specialized purposes were excluded from the analysis. Keyword frequency analysis and cluster analysis were conducted. Based on the findings of the study, the main results are summarized as follows. Firstly, the keyword frequency analysis encompassing both national and private universities revealed that research, education, corporate, student, hiring, and allowances were the most frequently occurring keywords across the board. Secondly, when analyzed by type of establishment, a key difference between national and private universities was identified: national universities had a higher frequency of student-related keywords compared to private universities, where keywords related to accounting and financial violations were more frequent. Thirdly, the cluster analysis results showed that the violation types were divided into four groups in the overall analysis, categorized as 'Organizational Personnel and Compensation System & Academic System Management,' 'Contract and Accounting Management,' 'Research Management,' and 'Committee and Scholarship System.' Fourthly, when analyzed by type of establishment, national universities were distinctly divided into four groups: research, personnel, academic, and accounting, whereas private universities were categorized into three groups due to research and contract and accounting management being combined into the same group. Based on these findings, recommendations for future research were proposed.

ДЕРЖАВНИЙ ФІНАНСОВИЙ АУДИТ: РЕАЛІЇ, ТЕНДЕНЦІЇ ТА НАПРЯМИ УДОСКОНАЛЕННЯ

The effective operation of the state, as well as its successful development, depends on the availability of budgetary funds, their proper distribution and use. That is why the problematic aspects of auditing in the field of public finance are of great importance. The state financial audit helps to assess the reliability of financial statements of state institutions and enterprises, which ensures transparency of their financial activities to the public and international partners. The audit helps to identify shortcomings in financial management and reveal opportunities for reducing costs and optimizing budget resources. Based on a thorough analysis of the national legislative and regulatory framework, the article presents the key differences between an independent audit and a state financial audit according to the following comparison criteria: concept; subjects; legal regulation; grounds for conducting; organizational and managerial support; financing; and documentation of the audit results. Particular attention is paid to the objects of the state financial audit, such as the implementation of budget programs, local budgets, activities of business entities, investment projects, use of information technology, state (regional) target programs. The article analyzes statistical reports on state financial audits conducted by the State Audit Service of Ukraine for 2018–2023. In particular, it was found that since 2019 the number of state financial audits conducted annually decreased, and in 2023 their number increased. At the same time, the share of components of the state financial audits conducted is approximately the same, except for state financial audits of investment projects, which were conducted only once in 2019 and twice in 2020. Based on the results of the state financial audits conducted in 2018–2023, the losses of financial and material resources caused by inefficient management actions or risky operations were compensated and prevented, and financial violations that caused losses of financial and material resources were eliminated. It is found that every year (except for 2021) both the amount of compensation and the amount of elimination of losses of financial and material resources, as well as the amount of eliminated financial violations, are increasing. The authors provide directions for improving the implementation of the state financial audit in Ukraine, which is an important tool for ensuring the stability and sustainable development of the Ukrainian economy, promotes confidence in public institutions, attracting investment and efficient use of budget funds.

Construction of Intelligent Financial Supervision Mechanism for Colleges and Universities Based on RPA Technology

Abstract The RPA financial monitoring mechanism utilizes a predictive model to capture and store university data in preprocessing, and adopts a decision tree algorithm to construct a specific predictive model with good classification ability, and its logical structure is very similar to the decision-making ideas of human beings in the natural environment. CNN-LSTM financial risk assessment model is also utilized to carry out scientific risk assessment, the output of CNN is used as the input of LSTM, combining the advantages of the two to improve the learning ability of the financial fraud risk assessment model, and dynamic early warning can be accomplished beforehand for potential risk points. By analyzing the accuracy and coverage of the financial violation prediction model, 10.28% of violations were found with 96.7% accuracy. The accuracy is lower when the proportion of financial violations is higher. Risk assessment of fundraising activities and working capital of universities can be found that Z private universities have a relatively single source of income, tuition income is dominant, and in 2019, 2020 and 2022, the proportion of constructive expenditures of Z private universities reaches more than 20%, while the expenses of scientific research costs are less, however, the university’s comprehensive early warning status is relatively good. The financial risk is not significant and is in a safer range. In the university research fund violation supervision, the weight of researchers still have balance funds after two years after the completion of the project is 0.073, which indicates that the research project fund management supervision is not in place.

PROBLEMS OF BALANCED PROTECTION OF THE RIGHTS AND INTERESTS OF CREDITORS AND CLIENTS AND THEIR POSSIBLE SOLUTIONS / ՎԱՐԿԱՎՈՐՈՂՆԵՐԻ ԵՎ ՀԱՃԱԽՈՐԴՆԵՐԻ ԻՐԱՎՈՒՆՔՆԵՐԻ ԵՎ ՇԱՀԵՐԻ ՀԱՇՎԵԿՇՌՎԱԾ ՊԱՇՏՊԱՆՎԱԾՈՒԹՅԱՆ ՀԻՄՆԱԽՆԴԻՐՆԵՐԸ ԵՎ ԴՐԱՆՑ ՀՆԱՐԱՎՈՐ ԼՈՒԾՈՒՄՆԵՐԸ

The development of financial markets is currently characterized by the emergence of new products, the expansion of the geography of financial organizations, the elimination of the boundaries of financial services, the creation of new platforms for the provision of financial products through the use of modern technologies and a number of other trends. On the one hand, they increase the availability of financial products and services for various groups of consumers, and on the other hand, they create additional risks of infringement of their interests and rights, new types of financial violations. As a result, all this ultimately affects the functioning of the financial market. The article is devoted to the protection of the rights and interests of creditors and clients in the provision of financial services. The risks in the provision of financial services as a result of the emergence of new financial products are analyzed. The tasks and objectives of behavioral control by the regulatory body are presented. Approaches aimed at improving the protection of the rights and interests of financial service providers and consumers are proposed.

Pengaruh Nilai-Nilai Islam terhadap Kualitas Audit pada Auditor Kantor Akuntan Publik di Makassar

Various cases of financial violations in companies that are not disclosed in the public accountant's report indicate the low quality of the audit. The cause of the low audit quality is due to the non-compliance with applicable ethical standards and auditing standards in regulating public accounting services. This study aims to determine the effect of Islamic values on audit quality. The type of research used is quantitative. This re-search was conducted on the auditors of the public accounting firm in Makassar. The sample used was purposive sampling with the criterion being that only Islamic auditors were respondents. The number of respondents who filled out the questionnaire through the google form was 146 people. Analysis of the results of qualitative research was carried out descriptively from the data information received while the analysis of quantitative research used structural equation modeling (SEM) analysis with the help of SmartPLS 3.0 soft-ware. The results showed that the value of monotheism, the value of monotheism, did not directly affect audit quality, monotheism had a direct effect on the value of the khilafah, the value of the khilafah had a direct effect on the quality of the audit and monotheism had an indirect effect on the quality of the audit through the value of the khilafah.

Implementation of blockchain technology in the system of accounting and analytical support for the public sector

The study addressed the problem of developing a mechanism for introducing blockchain technology into the system of accounting and analytical support for public sector entities. In the course of the research, the volumes and types of financial violations by public sector entities were analyzed. Identified violations were committed by public sector entities, and their significant share fell on the system of accounting and analytical support, in particular, financial reporting, budget execution. Legal restrictions on the introduction of blockchain technology for public sector entities were outlined. The absence of a number of acts in the field of digitization, protection of state secrets, cyber security, international standards, etc. in the legal field was established. The characteristics and mechanisms of blockchain technology were described, the types of blockchains based on permission models (open, closed) were defined. The technological characteristics of the use of blockchain platforms in the system of accounting and analytical support of public sector entities have been determined. The need to use blockchain applications such as smart contracts was indicated. It is noted that the use of smart contracts can be developed on blockchain platforms such as Ethereum, NXT, and Hyperledger; their key characteristics were described. A comparative description of transactions of state funds in the traditional accounting system and with the use of blockchain systems is given. The problem of the materiality of the transaction cost when transferring large volumes of data was outlined using the Ethereum platform as an example; its shortcomings were identified. The development of a mechanism for introducing blockchain technology into the system of accounting and analytical support using the Hyperledger platform, which has an open-source community focused on the development of a set of stable frameworks, tools, and libraries for deploying enterprise-level blockchains, was described. The advantages and disadvantages of introducing blockchain technology into the system of accounting and analytical support have been determined.

Financial Regulatory Technologization in the Context of Europe`s Digital Decade

The European Commission (EC) announced the Digital Decade as a vision for digital transformation of Europe by 2030 in four directions: skills, infrastructures, business, and government. Meanwhile, there is also an increasingly strong dependence of the financial sector on various technological innovations. Regulatory technologies in this regard play a key role in ensuring compliance with the ever-complex financial regulatory framework. The article analyzes the current state and prospects for the financial supervision system from the perspective of the European digital strategy. Emphasis is placed on the possibility of implementing smart technologies in the prevention of various financial violations and the formation of new levels of partnerships between financial institutions, regulators and RegTech firms as providers of regulatory expertise.

DETERMINASI WHISTLEBLOWING INTENTION MELALUI SIKAP ETHICAL AWARENESS DAN ETHICAL JUDGEMENT

Financial violations that occurred in Indonesia show no signs of ending soon. In the KPK report in 2022, there were 4,623 reports of alleged corruption through email and the KPK whistleblower system. This research was conducted empirically to reveal whether ethical awareness and ethical judgment affect a person's intention to whistleblow. The method used in this study is quantitative research method. Data collection is carried out in this using non-probability sampling or voluntary sampling techniques. Because in this study researchers collected data by distributing research questionnaires online through google form. The population in this study is FEB UHAMKA students who have obtained business law lessons. The number of samples obtained in this study was 249 respondents, this number of samples is above the minimum number of samples previously obtained using G-Power software. Then researchers use structural equation models with partial least square techniques through smartpls 4.0 software. The results of this study show that ethical awareness has a positive effect on the intention to whistleblow. Likewise with the variable of ethical judgment, it has a positive effect on the intention to do whistleblowing.
 Keywords: Ethical Awareness, Ethical Judgement, Whistleblowing

КОНТРОЛЬ ЗА ВИКОРИСТАННЯМ ДЕРЖАВНИХ КОШТІВ

The article is devoted to the study of control over the use of public funds on the basis of local budgets of Ukraine, considers the essence, principles, functions, current tasks, types, forms and methods of public financial control. The influence of state control of local budgets is revealed, the principles of public administration in the part of finances are substantiated. The purpose is to reveal the influence of state control of local budgets, the principles of public administration in the field of finance are substantiated. The control of public finances is carried out in order to ensure legality in the field of relations with special state bodies, prevention of financial violations, strengthening financial discipline in the formation, distribution and use of public funds. The role of public financial control is constantly growing, as it is an important means of administrative and legal regulation of economic, political and social processes in Ukraine, is not only a guarantee of transparency of state bodies and local governments, but also a guarantee of financial stability. Control over public funds is especially important in the field of public administration, as the effectiveness of its implementation depends on the successful development of the state economy. In addition, control over the distribution and use of public funds to the standards of public financial control will improve the coordination of regulatory bodies in managing budget processes at all levels of the budget, the implementation of control measures and management decisions. The practical application of state control, in particular the conduct of effective audits, will increase the effectiveness of control measures, create conditions for coordination of control bodies and controlled entities of state financial control, increase revenues to local budgets. The differences of the world's leading countries in terms of public financial control are presented.

ANALYTICAL ASSESSMENT OF THE STATE AUDIT SERVICE OF UKRAINE: STATUS, PROBLEMS, PROSPECTS

The article provides an analytical assessment of the activities of the State Audit Service of Ukraine (SAS of Ukraine) , as one of the controlling entities in the field of state financial control. The mission, basic principles and fundamental principles of the State Audit Service of Ukraine are defined. The main strategic goals, as well as the main priorities of the work of the institution, are disclosed. It has been found that control by the State Audit Service is ensured through state financial audit, inspection, procurement review and monitoring. The main tasks and functions of the State Audit Service in the implementation of state policy in the field of state financial control are characterized. It has been investigated that within the scope of preliminary and current control, the State Audit Service conducts audits of individual business operations and monitoring of purchases, and post-facto control includes audits of the implementation of the budget programs, audits of the implementation of local budgets, audits of the activities of business entities, verification of purchases and audits. The composition of interregional territorial bodies of the State Audit Service was studied: the Western, Southern, Northern, Northeastern and Eastern offices, which include the relevant regional offices. Analytical data on the effectiveness of the work of the State Audit Service of Ukraine for 2012-2021 are given, in particular, on the number of control measures and detected violations by their types. The structure of financial violations in 2021 is presented, of which illegal expenses and lack of financial resources occupy the largest share. Analytical data on the state of elimination of financial violations detected by the State Audit Service for the years 2012-2021, as well as the disciplinary and financial responsibility of guilty persons are presented. Digital data is visualized on the ratio of violations detected by the State Audit Service, as well as eliminated non-targeted expenditures of state resources, illegal expenditures, and shortages for the same period. It is detailed information on taking appropriate measures against violators of financial discipline by the bodies of the State Audit Service, handing over written notices of suspicion of criminal offenses, as well as bringing them to the administrative responsibility. Problematic aspects of the activity of the State Audit Service were identified and ways of solving them were proposed.

Corporate site visits and financial report quality

AbstractThis study examines the association between corporate site visits and visited firms’ financial reporting quality. Using a sample of publicly listed firms in China for the years 2009 through 2018 and four different measures of financial reporting quality, we find that firms receiving more site visits have higher financial reporting quality. Specifically, we find that corporate site visits are associated with a lower level of accrual‐based earnings management and a lower likelihood of financial violations and financial restatements. Moreover, we document a positive association between corporate site visits and the evaluation of earnings disclosure quality. We also find some evidence that the positive association between site visits and financial reporting quality is more pronounced among firms with greater institutional ownership and among state‐owned enterprises. Taken together, our findings underscore the monitoring role of corporate site visits in enhancing visited firms’ financial reporting quality. This research could be of interest to regulators and institutional investors by providing insight into assessing the benefits of selective access events that may influence the quality of financial reports.