The internal control system (ICS) is a monitoring mechanism that can help reduce internal and external agency costs. This paper investigates two research questions: 1. Is ICS disclosure, as a monitoring mechanism, associated with the characteristics of the board of directors, particularly the audit committee as the main board committee devoted to the effectiveness of ICS? 2. Does the regulatory environment, particularly the regulation on ICS disclosure as an external governance/monitoring mechanism, play a role in shaping the relationship between board monitoring and ICS disclosure and, if so, how? We study the ICS disclosure of 149 companies listed in four European financial markets (London, Paris, Frankfurt, and Milan), during a six-year period (2003–2008). Our findings support an inverse association between the extent of ICS disclosure and our proxies for board monitoring and are in line with the substitution hypothesis. We also find a statistically significant negative relationship between board monitoring and substantial ICS disclosure but no relationship between board monitoring and formal ICS disclosure. Our evidence also shows that the regulatory environment moderates the relationship between board monitoring and ICS disclosure by introducing trade-offs among monitoring mechanisms.