Internal control over financial reporting (ICFR) is crucial for preventing financial scandals and economic losses. Its effectiveness relies on coordinated cooperation among all participating entities. To investigate the logic and mechanisms of behavioral interactions among multiple agents within internal control over financial reporting and to achieve multi-agent collaboration, this study applies evolutionary game theory to model the internal control system. Our dynamic model involves the board of directors, management, and employees. We systematically analyze the evolutionary pathways of these agents’ strategies and their influencing factors. Our analysis highlights how reward-punishment mechanisms, cost inputs, and rent-seeking returns differentially impact agents’ behavioral strategies and drive system evolution. Using Jacobian matrix analysis and numerical simulations, we further explore these dynamics. The findings show that well-designed incentive and constraint mechanisms can significantly enhance proactive engagement from the board, management, and employees. These mechanisms also effectively mitigate rent-seeking behaviors and guide the internal control system toward a positive equilibrium. Conversely, insufficient incentives or lax supervision substantially increase the risk of internal control deficiencies. This research clarifies the cooperative pathways among key agents in financial reporting control. It also provides targeted practical recommendations for fostering multi-agent collaboration.
Zhai et al. (Thu,) studied this question.