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Author : 呂雅莉
Publisher :
ISBN 13 :
Total Pages : 126 pages
Book Rating : 4.:/5 (72 download)
Download or read book Disclosures of Material Internal Controls Weakness and Earnings Management written by 呂雅莉 and published by . This book was released on 2009 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Kam C. Chan
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (129 download)
Download or read book Earnings Management of Firms Reporting Material Internal Control Weaknesses Under Section 404 of the Sarbanes-Oxley Act written by Kam C. Chan and published by . This book was released on 2019 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: The main objectives of the Sarbanes-Oxley Act of 2002 are to improve the accuracy and reliability of corporate disclosure. Under Section 404 of the Sarbanes-Oxley Act, the external auditor has to report an assessment of the firm's internal controls and attest to management's assessment of those firm's internal controls. Material weaknesses in internal controls must be disclosed in the auditor and management reports. The objective of this study is to examine if firms reporting material internal control weaknesses under Section 404 have more earnings management compared to other firms. The results provide mild evidence that there are more positive and absolute discretionary accruals for firms reporting material internal control weaknesses than for other firms. Since the findings of ineffective internal controls by auditors under Section 404 may cause firms to improve their internal controls, Section 404 has the potential benefits of reducing the opportunity of intentional and unintentional accounting errors and of improving the quality of reported earnings.
Author : Kam C. Chan
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)
Download or read book Earnings Management and Return-Earnings Association of Firms Reporting Material Internal Control Weaknesses Under Section 404 of the Sarbanes-Oxley Act written by Kam C. Chan and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The main objectives of the Sarbanes-Oxley Act of 2002 are to improve the accuracy and reliability of corporate disclosure. Under Section 404 of SOX, an auditor has to report an assessment of a firm's internal controls and attest to management's assessment of the firm's internal control. Material weaknesses of internal controls must be disclosed in auditor and management reports. The objectives of this study are to examine if firms reporting material internal control weaknesses under Section 404 have more earnings management and lower return-earnings associations compared to other firms. The results provide mild evidence that there are more positive and absolute discretionary accruals for firms reporting material internal control weaknesses than for other firms. The findings also provide mild evidence that firms reporting material internal control weaknesses have lower return-earnings associations than other firms.
Author : Michael J. Ramos
Publisher : John Wiley & Sons
ISBN 13 : 0471656879
Total Pages : 306 pages
Book Rating : 4.4/5 (716 download)
Download or read book How to Comply with Sarbanes-Oxley Section 404 written by Michael J. Ramos and published by John Wiley & Sons. This book was released on 2004-03-29 with total page 306 pages. Available in PDF, EPUB and Kindle. Book excerpt: Designed specifically for Sarbanes-Oxley Section 404 compliance, How to Comply with Sarbanes-Oxley Section 404 features: A step-by-step approach to engagement performance Original material from a leading expert in auditing and accounting Practice aids, including forms, checklists, illustrations, diagrams, and tables In-depth explanations to help professionals understand how best to approach the internal control engagement Examples and action plans providing blueprints for implementing requirements of the Act Order your copy today!
Author : Aswath Damodaran
Publisher : FT Press
ISBN 13 : 0137036558
Total Pages : 604 pages
Book Rating : 4.1/5 (37 download)
Download or read book The Dark Side of Valuation written by Aswath Damodaran and published by FT Press. This book was released on 2009-06-19 with total page 604 pages. Available in PDF, EPUB and Kindle. Book excerpt: Renowned valuation expert Aswath Damodaran reviews the core tools of valuation, examines today’s most difficult estimation questions and issues, and then systematically addresses the valuation challenges that arise throughout a firm’s lifecycle in The Dark Side of Valuation: Valuing Young, Distressed and Complex Businesses. In this thoroughly revised edition, he broadens his perspective to consider all companies that resist easy valuation, highlighting specific types of hard-to-value firms, including commodity firms, cyclical companies, financial services firms, organizations dependent on intangible assets, and global firms operating diverse businesses. He covers the entire corporate lifecycle, from “idea” and “nascent growth” companies to those in decline and distress, and offers specific guidance for valuing technology, human capital, commodity, and cyclical firms. ·
Author : Jeffrey T. Doyle
Publisher :
ISBN 13 :
Total Pages : 49 pages
Book Rating : 4.:/5 (129 download)
Download or read book Accruals Quality and Internal Control Over Financial Reporting written by Jeffrey T. Doyle and published by . This book was released on 2010 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the relation between accruals quality and internal controls using 705 firms that disclosed at least one material weakness from August 2002 to November 2005 and find that weaknesses are generally associated with poorly estimated accruals that are not realized as cash flows. Further, we find that this relation between weak internal controls and lower accruals quality is driven by weakness disclosures that relate to overall company-level controls, which may be more difficult to quot;audit around.quot; We find no such relation for more auditable, account-specific weaknesses. We find similar results using four additional measures of accruals quality: discretionary accruals, average accruals quality, historical accounting restatements, and earnings persistence. Our results are robust to the inclusion of firm characteristics that proxy for difficulty in accrual estimation, known determinants of material weaknesses, and corrections for self-selection bias.
Author : Weili Ge
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book The Disclosure of Material Weaknesses in Internal Control After the Sarbanes-Oxley Act written by Weili Ge and published by . This book was released on 2006 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper focuses on a sample of 261 companies that have disclosed at least one material weakness in internal control in their SEC filings after the effective date of the Sarbanes-Oxley Act of 2002. Based on the descriptive material weakness disclosures provided by management, we find that poor internal control is usually related to an insufficient commitment of resources for accounting controls. Material weaknesses in internal control tend to be related to deficient revenue recognition policies, lack of segregation of duties, deficiencies in the period-end reporting process and accounting policies, and inappropriate account reconciliation. The most common account-specific material weaknesses occur in the current accrual accounts, such as the accounts receivable and inventory accounts. Material weakness disclosures by management also frequently describe internal control problems in complex accounts, such as the derivative and income tax accounts. In our statistical analysis, we find that disclosing a material weakness is positively associated with business complexity (e.g., multiple segments and foreign currency), negatively associated with firm size (e.g., market capitalization), and negatively associated with firm profitability (e.g., return on assets).
Author : Cristi A. Gleason
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Material Weaknesses in Tax-Related Internal Controls and Last Chance Earnings Management written by Cristi A. Gleason and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate consequences of tax-related material weaknesses in firms' internal controls over financial reporting. We hypothesize that the presence of internal control material weaknesses (i.e., ICMWs) over the tax function makes earnings management through the income tax accrual (Dhaliwal et al. 2004) easier to implement relative to firms with non-tax-related ICMWs. We also predict that the remediation of tax-related ICMWs has the effect of constraining earnings management through the tax accrual. The results provide support for our predictions and suggest that tax-related ICMWs are associated with greater tax-expense management.
Author : Yi-Chun Chen
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book Internal Control and Warranty Reserves written by Yi-Chun Chen and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior studies indicate that warranty reserves present two major aspects: a contingent liability and an information signal about growth prospects. In addition, managers use warranty accounting as a tool of earnings management to meet or beat earnings targets. In this paper, we hypothesize that Section 404 internal control weakness disclosures can help isolate information signal role of warranty reserves. The results reveal that warranty reserves serve as a stronger information signal for firms with an effective system than those with internal control weaknesses (ICW firms). Specifically, we first find that internal control weaknesses have an adverse effect on the relation between abnormal warranty accruals and future firm performance. Second, we find that investors give a more positive valuation of warranty reserves for firms with effective system than ICW firms. Finally, we find that the negative effect on information signal is more pronounced for material weaknesses related to sales/cost of goods sold and accrual estimation than others. Overall, these findings suggest that internal control report can be used to discriminate between information signal role and other roles served by warranty accruals.
Author : Stephen H. Bryan
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Download or read book Characteristics of Firms with Material Weaknesses in Internal Control written by Stephen H. Bryan and published by . This book was released on 2005 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The legislation known as Sarbanes Oxley (SOX) requires firms to assess their internal controls over financial reporting and to report material weaknesses, as defined by the Public Accounting Oversight Board. Based upon early evidence, we find that firms with material weaknesses are, on average, both smaller and worse performers than their matched industry counterparts. We also find that firms with material weaknesses, on average, have higher betas, suggesting a higher discount by the market for these firms. From a macro-economic view, the total market value of firms with reported material weaknesses is only 1.28% of the market value of the S&P 500 firms. Finally, although we document negative stock returns on the date of the announcement of the material weakness, over a narrow interval, the returns are insignificant. Identifying small firms that collectively constitute a minor portion of the economy at a very high cost to all public firms seems out of balance. Whether SOX will yield benefits to corporations through better operations, reduced cost of capital, or other means remains to be seen. Moreover, if these benefits materialize, whether they should, in effect, be legislated is a matter of debate. Although some maintain that SOX will reduce earnings management, firms continue to manage earnings through pro forma earnings. Furthermore, although the SEC's Reg G, also enacted as part of SOX legislation, makes the "managed disclosure system" through pro forma earnings more transparent, it fails to exercise control over the reconciliation process that firms use both to set and to meet analyst earnings estimates.
Author : Gary Engel
Publisher : DIANE Publishing
ISBN 13 : 143791683X
Total Pages : 45 pages
Book Rating : 4.4/5 (379 download)
Download or read book Financial Audit written by Gary Engel and published by DIANE Publishing. This book was released on 2009-11 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since the first audit of the fiscal year 1997 consolidated financial statements of the U.S. government (CFS), material weaknesses in internal control and other limitations on the scope of the work have prevented the auditor from expressing an opinion on the accrual basis CFS. Certain of those material weaknesses relate to inadequate systems, controls, and procedures to properly prepare the CFS. The purpose of this report is to: (1) provide details of the continuing material weaknesses related to the preparation of the CFS; (2) recommend improvements; and (3) provide the status of corrective actions taken to address the previous 56 recommendations in this area. Includes recommendations. Charts and tables.
Author : Brian J. Bolton
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (13 download)
Download or read book Industry Contagion Effects of Internal Control Material Weakness Disclosures written by Brian J. Bolton and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether there is an industry contagion effect for negative market reactions to internal control material weakness (ICMW) disclosures. From a sample of companies experiencing market share price declines to disclosures of ICMW over the years 2005-2014, results indicate that peer industry companies also experience market share price declines. We also find that the decline in share prices is related to accounting quality in that peer industry companies with higher accrual, relative to cash flow, components of earnings have larger negative market reaction compared to companies with lower accrual components of earnings. Our study contributes to the literature streams examining accounting information transfer and internal control quality.
Author : United States Government Accountability Office
Publisher : Lulu.com
ISBN 13 : 0359536395
Total Pages : 234 pages
Book Rating : 4.3/5 (595 download)
Download or read book Government Auditing Standards - 2018 Revision written by United States Government Accountability Office and published by Lulu.com. This book was released on 2019-03-24 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.
Author : Dan A. Simunic
Publisher : Canadian Certified General Accountants' Research Foundation = Fondation de recherche de l'Association des comptables généraux licenciés du Canada
ISBN 13 :
Total Pages : 90 pages
Book Rating : 4.3/5 (512 download)
Download or read book Product Differentiation in Auditing written by Dan A. Simunic and published by Canadian Certified General Accountants' Research Foundation = Fondation de recherche de l'Association des comptables généraux licenciés du Canada. This book was released on 1987 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: A fundamental question with respect to the market for audit services is whether or not such services are homogeneous across suppliers ... In this monograph, we review the basic principles and findings concerning differentiated product markets as they have been developed in the economic literature. Using Lancaster's characteristics framework, we posit that the audit service contains several attributes which are valued by top management. A key attribute is "credibility", which is communicated by an audit firm's brand name and is identified with the power of an auditor's test ... We posit that, along with other product characteristics, the power of test varies systematically across audit firms. Hypotheses concerning the demand for different audit service specifications (qualities) are developed in a context where companies are changing their capital structure through an initial public offering of common shares. These hypotheses are tested using a sample of 469 U.S. corporations which first "went public" during 1981. The results are consistent with the existence of differential audit services.
Author : Li Xu
Publisher :
ISBN 13 :
Total Pages : 54 pages
Book Rating : 4.:/5 (129 download)
Download or read book Internal Control Material Weakness, Analysts' Accuracy and Bias, And Brokerage Reputation written by Li Xu and published by . This book was released on 2015 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a sample of firms that disclose internal control material weaknesses under Sections 302 and 404 of the Sarbanes-Oxley Act, we investigate the relations between the accuracy and bias of financial analysts' earnings forecasts and disclosed internal control material weaknesses. We find that forecast accuracy is negatively related to material weaknesses in internal control when disclosed internal control material weaknesses are related to controls over firms' broader control environment (firm-level internal control). We also hypothesize and find that optimistic forecast bias is higher for firms disclosing firm-level internal control material weaknesses, suggesting that, due to the increased complexity related to inefficient internal control at firm-level, analysts intentionally bias their forecasts upward to gain favorable access to firms' internal information. In addition, we find that the optimistic bias only exists in forecasts issued by analysts who are affiliated with less reputable brokerage houses.
Author : Cornelius E. Tierney
Publisher : Wiley
ISBN 13 : 0470036893
Total Pages : 320 pages
Book Rating : 4.4/5 (7 download)
Download or read book OMB Circular A-123 and Sarbanes-Oxley written by Cornelius E. Tierney and published by Wiley. This book was released on 2006-07-28 with total page 320 pages. Available in PDF, EPUB and Kindle. Book excerpt: How is A-123 different from Section 404 of the SOX Act? What is required of federal agencies with the revision of A-123? The definitive guide for federal compliance with OMB Circular A-123 and SOX Section 404, OMB Circular A-123 and Sarbanes-Oxley: Management's Responsibility for Internal Control in Federal Agencies leads readers through every step of the planning, evaluation, testing, and reporting/collecting of processes associated with OMB Circular A-123 and SOX Section 404 compliance, including: * Internal control criteria * Internal control assessment: project planning * Identifying significant control objectives * Documentation of significant controls * Testing and evaluating entity-level controls and activity-level controls The result of numerous consultations over many years with accountants, auditors, financial managers, and systems consultants specializing in the financial management issues of the federal government, this hands-on guide quickly brings you up to speed on the latest revisions and rules in federal financial internal control requirements.
Author : Seokyoun Hwang
Publisher :
ISBN 13 :
Total Pages : 51 pages
Book Rating : 4.:/5 (13 download)
Download or read book The Impact of Internal Control Weaknesses on Pension Assumptions Manipulation written by Seokyoun Hwang and published by . This book was released on 2017 with total page 51 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effect of internal control weaknesses (ICWs) on managers' choice of pension assumptions, using data disclosed under Sarbanes-Oxley Section 404 from 2004 to 2012. We hypothesize that firms with ICWs are better able to opportunistically set pension assumptions, such as the expected rate of return (ERR) and the discount rate (DR), which in turn help to report higher earnings or healthier balance sheets. First, we find that firms tend to report higher ERR and DR when they receive an adverse audit opinion on internal control. In addition, we find that the firms facing more incentives to manage the funding status of pension plan are likely to choose higher DR in response to the incentives. Next, we find that firms with ICWs are more likely to adjust their biased ERR when they receive an unqualified audit opinion on internal control. Finally, we find that market returns are significantly negative for the firms assuming higher ERR in the 3-day window around the disclosure of material weaknesses if the firms' earnings are sensitive to the changed ERR.
