Author : Daniel Russomanno
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (94 download)
Book Synopsis Changes in Internal Controls and Auditor Effort Around the Initiation of a Chief Accounting Officer (CAO) Position by : Daniel Russomanno
Download or read book Changes in Internal Controls and Auditor Effort Around the Initiation of a Chief Accounting Officer (CAO) Position written by Daniel Russomanno and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I examine whether the addition of a Chief Accounting Officer (CAO) to the top management team improves firms' internal controls and allows a reduction in efforts by the firms' external auditors. I find firm size, auditor quality, and acquisition or restructuring activity significantly increases the likelihood of a firm having a CAO position. After controlling for factors associated with the decision to create the CAO position, I find that firms that establish a CAO position on their top management team improve their internal control system more than firms without a CAO position on their top management team. In addition, CAO firms realize a reduction in auditor fees following the addition of a CAO position on their top management team. Overall, these findings suggest that the introduction of a CAO position to the top management team substantively improves the quality of firms' internal control over financial reporting and a reduction in the auditors' assessment of the firms' control risk.